Hedge Funds Are Piling Into Vail Resorts, Inc. (MTN)

The Insider Monkey team has completed processing the quarterly 13F filings for the June quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Vail Resorts, Inc. (NYSE:MTN).

Vail Resorts, Inc. (NYSE:MTN) was in 40 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 39. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. MTN investors should be aware of an increase in enthusiasm from smart money recently. There were 36 hedge funds in our database with MTN holdings at the end of March. Our calculations also showed that MTN isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

John Rogers of Ariel Investments

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech stock. We go through lists like the 10 best EV 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 we’re going to analyze the recent hedge fund action encompassing Vail Resorts, Inc. (NYSE:MTN).

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

Heading into the third quarter of 2021, a total of 40 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 11% from the first quarter of 2020. By comparison, 37 hedge funds held shares or bullish call options in MTN a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

The largest stake in Vail Resorts, Inc. (NYSE:MTN) was held by Select Equity Group, which reported holding $220.4 million worth of stock at the end of June. It was followed by Ariel Investments with a $111.9 million position. Other investors bullish on the company included Diamond Hill Capital, D E Shaw, and Renaissance Technologies. In terms of the portfolio weights assigned to each position Aravt Global allocated the biggest weight to Vail Resorts, Inc. (NYSE:MTN), around 5.37% of its 13F portfolio. Land & Buildings Investment Management is also relatively very bullish on the stock, earmarking 2.1 percent of its 13F equity portfolio to MTN.

With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Renaissance Technologies, created the biggest position in Vail Resorts, Inc. (NYSE:MTN). Renaissance Technologies had $51.7 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also initiated a $24.6 million position during the quarter. The other funds with new positions in the stock are Simon Sadler’s Segantii Capital, Jonathan Litt’s Land & Buildings Investment Management, and Steve Zheng’s Deepcurrents Investment Group.

Let’s check out hedge fund activity in other stocks similar to Vail Resorts, Inc. (NYSE:MTN). These stocks are The Gap Inc. (NYSE:GPS), FactSet Research Systems Inc. (NYSE:FDS), Quanta Services Inc (NYSE:PWR), Steel Dynamics, Inc. (NASDAQ:STLD), Fidelity National Financial Inc (NYSE:FNF), Atmos Energy Corporation (NYSE:ATO), and Guardant Health, Inc. (NASDAQ:GH). This group of stocks’ market valuations are similar to MTN’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 34 hedge funds with bullish positions and the average amount invested in these stocks was $855 million. That figure was $884 million in MTN’s case. Guardant Health, Inc. (NASDAQ:GH) is the most popular stock in this table. On the other hand Atmos Energy Corporation (NYSE:ATO) is the least popular one with only 18 bullish hedge fund positions. Vail Resorts, Inc. (NYSE:MTN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MTN is 74.5. 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. 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 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. Hedge funds were also right about betting on MTN as the stock returned 7.4% since the end of Q2 (through 10/11) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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