Hedge Funds Are Buying Trip.com Group Limited (TCOM)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 866 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31st holdings, data that is available nowhere else. Should you consider Trip.com Group Limited (NASDAQ:TCOM) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Is Trip.com Group Limited (NASDAQ:TCOM) going to take off soon? Investors who are in the know were turning bullish. The number of long hedge fund bets rose by 1 lately. Trip.com Group Limited (NASDAQ:TCOM) was in 35 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 67. Our calculations also showed that TCOM isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Kerr Neilson of Platinum Asset Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a look at the key hedge fund action surrounding Trip.com Group Limited (NASDAQ:TCOM).

Do Hedge Funds Think TCOM Is A Good Stock To Buy Now?

At the end of March, a total of 35 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from the previous quarter. The graph below displays the number of hedge funds with bullish position in TCOM over the last 23 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Fisher Asset Management held the most valuable stake in Trip.com Group Limited (NASDAQ:TCOM), which was worth $379.6 million at the end of the fourth quarter. On the second spot was Platinum Asset Management which amassed $301.6 million worth of shares. Alkeon Capital Management, Pzena Investment Management, and Kontiki Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Kontiki Capital allocated the biggest weight to Trip.com Group Limited (NASDAQ:TCOM), around 24.53% of its 13F portfolio. Broad Peak Investment Holdings is also relatively very bullish on the stock, dishing out 8.42 percent of its 13F equity portfolio to TCOM.

Now, key hedge funds have been driving this bullishness. Segantii Capital, managed by Simon Sadler, initiated the most outsized position in Trip.com Group Limited (NASDAQ:TCOM). Segantii Capital had $43.6 million invested in the company at the end of the quarter. Run Ye, Junji Takegami and Hoyon Hwang’s Tiger Pacific Capital also initiated a $40.4 million position during the quarter. The following funds were also among the new TCOM investors: Dmitry Balyasny’s Balyasny Asset Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s check out hedge fund activity in other stocks similar to Trip.com Group Limited (NASDAQ:TCOM). These stocks are United Rentals, Inc. (NYSE:URI), Canon Inc. (NYSE:CAJ), Synchrony Financial (NYSE:SYF), Coca-Cola Europacific Partners plc (NYSE:CCEP), Realty Income Corporation (NYSE:O), Slack Technologies Inc (NYSE:WORK), and Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK). This group of stocks’ market valuations are closest to TCOM’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 29.4 hedge funds with bullish positions and the average amount invested in these stocks was $1237 million. That figure was $2144 million in TCOM’s case. Slack Technologies Inc (NYSE:WORK) is the most popular stock in this table. On the other hand Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK) is the least popular one with only 4 bullish hedge fund positions. Trip.com Group Limited (NASDAQ:TCOM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TCOM is 49.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 19.3% in 2021 through June 25th and beat the market again by 4.8 percentage points. Unfortunately TCOM wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on TCOM were disappointed as the stock returned -9.8% since the end of March (through 6/25) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.