Orient-Express Hotels Ltd. (NYSE:OEH) was in 19 hedge funds’ portfolio at the end of March. OEH has experienced an increase in activity from the world’s largest hedge funds of late. There were 9 hedge funds in our database with OEH holdings at the end of the previous quarter.
In the eyes of most stock holders, hedge funds are assumed to be underperforming, outdated investment vehicles of yesteryear. While there are more than 8000 funds in operation at present, we at Insider Monkey hone in on the leaders of this group, about 450 funds. Most estimates calculate that this group has its hands on the majority of the hedge fund industry’s total asset base, and by monitoring their highest performing stock picks, we have unsheathed a number of investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as important, optimistic insider trading activity is a second way to parse down the world of equities. Just as you’d expect, there are lots of motivations for an executive to cut shares of his or her company, but just one, very clear reason why they would initiate a purchase. Several empirical studies have demonstrated the market-beating potential of this strategy if piggybackers know where to look (learn more here).
With all of this in mind, we’re going to take a glance at the recent action regarding Orient-Express Hotels Ltd. (NYSE:OEH).
How have hedgies been trading Orient-Express Hotels Ltd. (NYSE:OEH)?
Heading into Q2, a total of 19 of the hedge funds we track were bullish in this stock, a change of 111% from the previous quarter. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes significantly.
When looking at the hedgies we track, Cliff Asness’s AQR Capital Management had the largest position in Orient-Express Hotels Ltd. (NYSE:OEH), worth close to $31.4 million, accounting for 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is James Dinan of York Capital Management, with a $31.2 million position; 0.7% of its 13F portfolio is allocated to the stock. Some other hedgies with similar optimism include Charles Clough’s Clough Capital Partners, Chuck Royce’s Royce & Associates and John Khoury’s Long Pond Capital.
As aggregate interest increased, key money managers were breaking ground themselves. AQR Capital Management, managed by Cliff Asness, initiated the largest position in Orient-Express Hotels Ltd. (NYSE:OEH). AQR Capital Management had 31.4 million invested in the company at the end of the quarter. James Dinan’s York Capital Management also made a $31.2 million investment in the stock during the quarter. The other funds with brand new OEH positions are John Khoury’s Long Pond Capital, Ward Davis and Brian Agnew’s Caerus Global Investors, and Louis Bacon’s Moore Global Investments.
What have insiders been doing with Orient-Express Hotels Ltd. (NYSE:OEH)?
Bullish insider trading is most useful when the company we’re looking at has experienced transactions within the past 180 days. Over the latest half-year time frame, Orient-Express Hotels Ltd. (NYSE:OEH) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let’s also review hedge fund and insider activity in other stocks similar to Orient-Express Hotels Ltd. (NYSE:OEH). These stocks are Choice Hotels International, Inc. (NYSE:CHH), Ryman Hospitality Properties, Inc. (REIT) (NYSE:RHP), 7 DAYS GROUP HOLDINGS LIMITED (ADR) (NYSE:SVN), China Lodging Group, Ltd (ADR) (NASDAQ:HTHT), and Home Inns & Hotels Management Inc. (ADR) (NASDAQ:HMIN). This group of stocks belong to the lodging industry and their market caps are similar to OEH’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Choice Hotels International, Inc. (NYSE:CHH) | 7 | 0 | 4 |
| Ryman Hospitality Properties, Inc. (REIT) (NYSE:RHP) | 25 | 0 | 5 |
| 7 DAYS GROUP HOLDINGS LIMITED(ADR) (NYSE:SVN) | 10 | 0 | 0 |
| China Lodging Group, Ltd (ADR) (NASDAQ:HTHT) | 8 | 0 | 0 |
| Home Inns & Hotels Management Inc. (ADR) (NASDAQ:HMIN) | 10 | 0 | 0 |
With the results exhibited by our time-tested strategies, retail investors must always keep an eye on hedge fund and insider trading sentiment, and Orient-Express Hotels Ltd. (NYSE:OEH) is an important part of this process.
