Hedge Funds Are Betting Big on These Q2 IPOs

Betting On Las Vegas Recovery

The IPO of Red Rock Resorts Inc (NASDAQ:RRR) attracted the attention of 21 of investors tracked by Insider Monkey, which collectively held 20% of the company’s common stock at the end of June. The largest position was disclosed by Serengeti Asset Management, a fund run by Jody Lanasa. According to its latest 13F filing, the fund held approximately 1.62 million shares worth $33.6 million, making this its largest equity position. Jacob Doft‘s Highline Capital Management was also invested, having acquired a little over 1.31 million shares valued at $28.8 million. Red Rock Resorts Inc (NASDAQ:RRR) operates and manages 21 casino and entertainment resorts in Las Vegas. The company has a market cap of $2.63 billion and pays an annual dividend of $0.40 per share, providing investors with a 1.75% yield. Analysts at Citigroup have recently reiterated their ‘Buy’ rating on Red Rock Resorts Inc (NASDAQ:RRR), having also set a $25 price target, which implies an upside potential of 10%.

Bullish On US Foods Holding Corp

The runner up in this top is US Foods Holding Corp (NYSE:USFD), which 27 of the funds we follow reported in their equity portfolios for the end of June. Ricky Sandler’s Eminence Capital made a $121 million investment in the company, having bought some 5.02 million shares. Billionaire Ken Griffin‘s Citadel Investment Group has also placed a large bet on US Foods Holding Corp (NYSE:USFD), as it held 4.52 million shares worth a little over $109 million at the end of June. Following the IPO, the stock has been wobbling around without a clear director, oscillating between $23 and $25.5 levels. US Foods Holding Corp (NYSE:USFD) managed to stay in line with analysts’ estimates for the second quarter, having reported $5.8 billion in sales and a loss of $0.07 per share. Analysts at Bank of America Corp initiated coverage on this stock at the end of June and have assigned a ‘Buy’ rating and a price target of $29 per share.

REITs Are Hot

The most popular company that went public during the second quarter was MGM Growth Properties LLC (NYSE:MGP). By the end of June, 28 of the funds we track had established a position in this stock, amassing 26% of the company’s outstanding shares. According to its latest 13F filing, Anand Parekh’s Alyeska Investment Group held 2.05 million shares worth roughly $54.8 million at the end of the quarter. Ken Griffin and his team have invested in MGM Growth Properties LLC (NYSE:MGP) as well, with Citadel Investment Group holding 1.93 million shares valued at $51.4 million. The company has a market cap of $1.5 billion and pays an annual dividend of $1.43 per share, providing investors with a nice 5.5% yield. For the second quarter, the real estate investment trust posted $64.5 million in funds from operations, or $0.32 per share. The results was roughly in line with analysts’ expectations, who had projected $0.31 per share. MGM Growth Properties LLC (NYSE:MGP) also posted $110.9 million in revenue for the period.

Disclosure: none.