Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Ashford Hospitality Trust, Inc. (NYSE:AHT).
Ashford Hospitality Trust, Inc. (NYSE:AHT) was in 10 hedge funds’ portfolios at the end of June. The all time high for this statistic is 18. AHT has experienced a decrease in support from the world’s most elite money managers recently. There were 12 hedge funds in our database with AHT holdings at the end of March. Our calculations also showed that AHT isn’t among the 30 most popular stocks among hedge funds (click for Q2 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 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Robert Pohly of Samlyn Capital
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 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 take a look at the recent hedge fund action encompassing Ashford Hospitality Trust, Inc. (NYSE:AHT).
Do Hedge Funds Think AHT Is A Good Stock To Buy Now?
At the end of June, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -17% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in AHT over the last 24 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, Millennium Management held the most valuable stake in Ashford Hospitality Trust, Inc. (NYSE:AHT), which was worth $16.5 million at the end of the second quarter. On the second spot was Citadel Investment Group which amassed $4.1 million worth of shares. Citadel Investment Group, Samlyn Capital, and PEAK6 Capital Management 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 Algert Global allocated the biggest weight to Ashford Hospitality Trust, Inc. (NYSE:AHT), around 0.08% of its 13F portfolio. Precept Capital Management is also relatively very bullish on the stock, designating 0.08 percent of its 13F equity portfolio to AHT.
Since Ashford Hospitality Trust, Inc. (NYSE:AHT) has witnessed a decline in interest from the entirety of the hedge funds we track, we can see that there were a few hedgies that elected to cut their full holdings by the end of the second quarter. It’s worth mentioning that Renaissance Technologies said goodbye to the biggest stake of the 750 funds monitored by Insider Monkey, worth about $1.6 million in stock. Paul Tudor Jones’s fund, Tudor Investment Corp, also cut its stock, about $0.3 million worth. These moves are interesting, as total hedge fund interest was cut by 2 funds by the end of the second quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Ashford Hospitality Trust, Inc. (NYSE:AHT) but similarly valued. These stocks are Hollysys Automation Technologies Ltd (NASDAQ:HOLI), Moneygram International Inc (NYSE:MGI), NetSTREIT Corp. (NYSE:NTST), Rafael Holdings, Inc. (NYSE:RFL), Interface, Inc. (NASDAQ:TILE), iTeos Therapeutics, Inc. (NASDAQ:ITOS), and Heritage Financial Corporation (NASDAQ:HFWA). All of these stocks’ market caps are closest to AHT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HOLI | 19 | 106815 | 1 |
| MGI | 24 | 224007 | 3 |
| NTST | 10 | 105672 | 0 |
| RFL | 8 | 55044 | 0 |
| TILE | 11 | 28490 | -1 |
| ITOS | 15 | 192274 | 3 |
| HFWA | 8 | 21282 | 3 |
| Average | 13.6 | 104798 | 1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.6 hedge funds with bullish positions and the average amount invested in these stocks was $105 million. That figure was $23 million in AHT’s case. Moneygram International Inc (NYSE:MGI) is the most popular stock in this table. On the other hand Rafael Holdings, Inc. (NYSE:RFL) is the least popular one with only 8 bullish hedge fund positions. Ashford Hospitality Trust, Inc. (NYSE:AHT) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AHT is 25.9. 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 negative signal and 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 25.7% in 2021 through September 27th and surpassed the market again by 6.2 percentage points. Unfortunately AHT wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); AHT investors were disappointed as the stock returned -64.4% since the end of June (through 9/27) 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 most of these stocks already outperformed the market in 2021.
Follow Ashford Hospitality Trust Inc (NYSE:AHT)
Follow Ashford Hospitality Trust Inc (NYSE:AHT)
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Disclosure: None. This article was originally published at Insider Monkey.
