Hedge Funds Are Buying HomeAway, Inc. (AWAY)

Does HomeAway, Inc. (NASDAQ:AWAY) represent a good buying opportunity at the moment? Let’s briefly check the hedge fund sentiment towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail unconceivably on some occasions, but their stock picks have been generating superior risk-adjusted returns on average over the years.

Is HomeAway, Inc. (NASDAQ:AWAY) a buy here? Hedge funds are becoming more confident. The number of bullish hedge fund bets rose by 5 lately. 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 Impax Laboratories Inc (NASDAQ:IPXL), CST Brands Inc (NYSE:CST), and Dana Holding Corporation (NYSE:DAN) to gather more data points.

Keeping this in mind, let’s analyze the new action surrounding HomeAway, Inc. (NASDAQ:AWAY).

How are hedge funds trading HomeAway, Inc. (NASDAQ:AWAY)?

At the end of the third quarter, a total of 36 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 16% from the second quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Eminence Capital, managed by Ricky Sandler, holds the biggest position in HomeAway, Inc. (NASDAQ:AWAY). Eminence Capital has a $106.8 million position in the stock, comprising 1.6% of its 13F portfolio. The second largest stake is held by Bares Capital Management, managed by Brian Bares, which holds a $61.6 million position; 6.1% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors that are bullish contain Masroor Siddiqui and Bruce Emery’s Naya Capital, Israel Englander’s Millennium Management and Robert Pitts’s Steadfast Capital Management.

With a general bullishness amongst the heavyweights, key money managers have jumped into HomeAway, Inc. (NASDAQ:AWAY) headfirst. Millennium Management, managed by Israel Englander, assembled the most outsized position in HomeAway, Inc. (NASDAQ:AWAY). Millennium Management had $35.5 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $7.1 million investment in the stock during the quarter. The other funds with brand new AWAY positions are Lee Munder’s Lee Munder Capital Group, Benjamin A. Smith’s Laurion Capital Management, and Ed Bosek’s BeaconLight Capital.

Let’s check out hedge fund activity in other stocks similar to HomeAway, Inc. (NASDAQ:AWAY). These stocks are Impax Laboratories Inc (NASDAQ:IPXL), CST Brands Inc (NYSE:CST), Dana Holding Corporation (NYSE:DAN), and Pebblebrook Hotel Trust (NYSE:PEB). This group of stocks’ market valuations are closest to AWAY’s market valuation.

As you can see these stocks had an average of 20.25 hedge funds with bullish positions and the average amount invested in these stocks was $429 million. That figure was $492 million in AWAY’s case. Impax Laboratories Inc (NASDAQ:IPXL) is the most popular stock in this table. On the other hand Pebblebrook Hotel Trust (NYSE:PEB) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks HomeAway, Inc. (NASDAQ:AWAY) 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.