The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge funds have been producing disappointing net returns in recent years, however that was partly due to the poor performance of small-cap stocks in general. Well, small-cap stocks finally turned the corner and have been beating the large-cap stocks by more than 10 percentage points over the last 5 months.This means the relevancy of hedge funds’ public filings became inarguable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Extended Stay America Inc (NYSE:STAY).
Is Extended Stay America Inc (NYSE:STAY) a superb investment today? Prominent investors are in a bullish mood. The number of bullish hedge fund positions inched up by 6 lately. STAY was in 22 hedge funds’ portfolios at the end of September. There were 16 hedge funds in our database with STAY holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as B&G Foods, Inc. (NYSE:BGS), Nortel Inversora S.A. (ADR) (NYSE:NTL), and Team Health Holdings LLC (NYSE:TMH) to gather more data points.
Follow Extended Stay America Inc. (NYSE:STAY)
Follow Extended Stay America Inc. (NYSE:STAY)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Now, let’s view the key action surrounding Extended Stay America Inc (NYSE:STAY).
What have hedge funds been doing with Extended Stay America Inc (NYSE:STAY)?
At Q3’s end, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a jump of 38% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, John Paulson’s Paulson & Co has the most valuable position in Extended Stay America Inc (NYSE:STAY), worth close to $535 million, accounting for 5.8% of its total 13F portfolio. On Paulson & Co’s heels is Centerbridge Partners, managed by Mark T. Gallogly, which holds a $530.3 million position; the fund has 43.4% of its 13F portfolio invested in the stock. Other peers that are bullish comprise Jeffrey Furber’s AEW Capital Management, Jeffrey Jacobowitz’s Simcoe Capital Management and Robert Pohly’s Samlyn Capital.
As aggregate interest increased, specific money managers were leading the bulls’ herd. Samlyn Capital, managed by Robert Pohly, initiated the biggest position in Extended Stay America Inc (NYSE:STAY). According to regulatory filings, the fund had $14.9 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also made a $14.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, Daniel S. Och’s OZ Management, and Gregg Moskowitz’s Interval Partners.
Let’s go over hedge fund activity in other stocks similar to Extended Stay America Inc (NYSE:STAY). These stocks are B&G Foods, Inc. (NYSE:BGS), Nortel Inversora S.A. (ADR) (NYSE:NTL), Team Health Holdings LLC (NYSE:TMH), and RLI Corp. (NYSE:RLI). All of these stocks’ market caps are similar to STAY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BGS | 19 | 258814 | 4 |
| NTL | 4 | 26053 | 0 |
| TMH | 20 | 494670 | -5 |
| RLI | 9 | 120998 | -2 |
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $225 million. That figure was a whooping $1.22 billion in STAY’s case. Team Health Holdings LLC (NYSE:TMH) is the most popular stock in this table. On the other hand Nortel Inversora S.A. (ADR) (NYSE:NTL) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Extended Stay America Inc (NYSE:STAY) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: none.
