Hedge Funds Are Selling Sabre Corporation (SABR)

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Sabre Corporation (NASDAQ:SABR).

Is Sabre Corporation (NASDAQ:SABR) a buy, sell, or hold? Money managers were in a bearish mood. The number of long hedge fund positions dropped by 3 in recent months. Sabre Corporation (NASDAQ:SABR) was in 37 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 46. Our calculations also showed that SABR isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Today there are a multitude of tools stock traders employ to evaluate publicly traded companies. Two of the best tools are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the best fund managers can beat the S&P 500 by a very impressive margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

Steven Cohen of Point72 Asset Management

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 let’s go over the key hedge fund action surrounding Sabre Corporation (NASDAQ:SABR).

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

Heading into the third quarter of 2021, a total of 37 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from the first quarter of 2020. By comparison, 39 hedge funds held shares or bullish call options in SABR a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Terry Smith’s Fundsmith LLP has the largest position in Sabre Corporation (NASDAQ:SABR), worth close to $194.5 million, comprising 0.5% of its total 13F portfolio. The second most bullish fund manager is Paul Reeder and Edward Shapiro of PAR Capital Management, with a $190 million position; 4.7% of its 13F portfolio is allocated to the company. Remaining members of the smart money that are bullish consist of Jonathan Guo’s Yiheng Capital, Tom Wagner and Ara Cohen’s Knighthead Capital and Paul Marshall and Ian Wace’s Marshall Wace LLP. In terms of the portfolio weights assigned to each position Collaborative Holdings Management allocated the biggest weight to Sabre Corporation (NASDAQ:SABR), around 11.55% of its 13F portfolio. Hill City Capital is also relatively very bullish on the stock, dishing out 9.28 percent of its 13F equity portfolio to SABR.

Since Sabre Corporation (NASDAQ:SABR) has experienced a decline in interest from the entirety of the hedge funds we track, it’s easy to see that there lies a certain “tier” of money managers that elected to cut their entire stakes last quarter. At the top of the heap, David Fiszel’s Honeycomb Asset Management dumped the biggest investment of all the hedgies monitored by Insider Monkey, worth close to $14.8 million in stock. D. E. Shaw’s fund, D E Shaw, also said goodbye to its stock, about $9.6 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 3 funds last quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Sabre Corporation (NASDAQ:SABR) but similarly valued. These stocks are Hecla Mining Company (NYSE:HL), BankUnited Inc (NYSE:BKU), Physicians Realty Trust (NYSE:DOC), Iovance Biotherapeutics, Inc. (NASDAQ:IOVA), First Majestic Silver Corp (NYSE:AG), Enable Midstream Partners LP (NYSE:ENBL), and Overstock.com, Inc. (NASDAQ:OSTK). This group of stocks’ market values are similar to SABR’s market value.

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As you can see these stocks had an average of 17.3 hedge funds with bullish positions and the average amount invested in these stocks was $327 million. That figure was $972 million in SABR’s case. Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) is the most popular stock in this table. On the other hand Enable Midstream Partners LP (NYSE:ENBL) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Sabre Corporation (NASDAQ:SABR) is more popular among hedge funds. Our overall hedge fund sentiment score for SABR is 76.1. 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. Unfortunately SABR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SABR were disappointed as the stock returned -10.9% since the end of the second quarter (through 10/11) 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 since 2019.

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