Hedge Funds Are Dumping Wyndham Hotels & Resorts, Inc. (WH)

In this article you are going to find out whether hedge funds think Wyndham Hotels & Resorts, Inc. (NYSE:WH) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

Wyndham Hotels & Resorts, Inc. (NYSE:WH) shareholders have witnessed a decrease in enthusiasm from smart money lately. Wyndham Hotels & Resorts, Inc. (NYSE:WH) was in 24 hedge funds’ portfolios at the end of March. The all time high for this statistic is 44. There were 26 hedge funds in our database with WH positions at the end of the fourth quarter. Our calculations also showed that WH isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

In the eyes of most shareholders, hedge funds are assumed to be slow, outdated investment vehicles of yesteryear. While there are more than 8000 funds in operation today, Our experts look at the upper echelon of this club, approximately 850 funds. Most estimates calculate that this group of people orchestrate the lion’s share of the smart money’s total asset base, and by following their best stock picks, Insider Monkey has uncovered a few investment strategies that have historically surpassed Mr. Market. Insider Monkey’s flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Jeffrey Gates of Gates Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. 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. With all of this in mind let’s check out the fresh hedge fund action surrounding Wyndham Hotels & Resorts, Inc. (NYSE:WH).

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

Heading into the second quarter of 2021, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards WH over the last 23 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

The largest stake in Wyndham Hotels & Resorts, Inc. (NYSE:WH) was held by Long Pond Capital, which reported holding $169.3 million worth of stock at the end of December. It was followed by Gates Capital Management with a $106.9 million position. Other investors bullish on the company included Tremblant Capital, Citadel Investment Group, and Impactive Capital. In terms of the portfolio weights assigned to each position Impactive Capital allocated the biggest weight to Wyndham Hotels & Resorts, Inc. (NYSE:WH), around 9.68% of its 13F portfolio. East Side Capital (RR Partners) is also relatively very bullish on the stock, earmarking 8.31 percent of its 13F equity portfolio to WH.

Because Wyndham Hotels & Resorts, Inc. (NYSE:WH) has experienced falling interest from the smart money, it’s easy to see that there is a sect of money managers that elected to cut their positions entirely last quarter. Interestingly, Gavin Baker’s Atreides Management dropped the biggest position of all the hedgies tracked by Insider Monkey, valued at an estimated $28.8 million in stock. Kerr Neilson’s fund, Platinum Asset Management, also cut its stock, about $6.3 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 2 funds last quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Wyndham Hotels & Resorts, Inc. (NYSE:WH) but similarly valued. We will take a look at ANGI Inc (NASDAQ:ANGI), Littelfuse, Inc. (NASDAQ:LFUS), Penske Automotive Group, Inc. (NYSE:PAG), Life Storage, Inc. (NYSE:LSI), OGE Energy Corp. (NYSE:OGE), JetBlue Airways Corporation (NASDAQ:JBLU), and Ritchie Bros. Auctioneers Incorporated (NYSE:RBA). All of these stocks’ market caps are closest to WH’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 23.6 hedge funds with bullish positions and the average amount invested in these stocks was $294 million. That figure was $838 million in WH’s case. ANGI Inc (NASDAQ:ANGI) is the most popular stock in this table. On the other hand Penske Automotive Group, Inc. (NYSE:PAG) is the least popular one with only 12 bullish hedge fund positions. Wyndham Hotels & Resorts, Inc. (NYSE:WH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for WH is 45.5. 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 23.8% in 2021 through July 16th and beat the market again by 7.7 percentage points. Unfortunately WH wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on WH were disappointed as the stock returned -2.1% since the end of March (through 7/16) 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.