Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT) was in 31 hedge funds’ portfolio at the end of the fourth quarter of 2012. HOT investors should be aware of a decrease in hedge fund sentiment of late. There were 35 hedge funds in our database with HOT holdings at the end of the previous quarter.
To most market participants, hedge funds are viewed as unimportant, old investment tools of yesteryear. While there are greater than 8000 funds trading at the moment, we hone in on the aristocrats of this club, close to 450 funds. It is estimated that this group has its hands on the lion’s share of the hedge fund industry’s total asset base, and by paying attention to their top stock picks, we have figured out a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).
Equally as integral, bullish insider trading activity is another way to break down the world of equities. As the old adage goes: there are many reasons for an upper level exec to sell shares of his or her company, but only one, very simple reason why they would behave bullishly. Plenty of academic studies have demonstrated the valuable potential of this strategy if investors understand what to do (learn more here).
With these “truths” under our belt, we’re going to take a glance at the recent action surrounding Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT).
How have hedgies been trading Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT)?
In preparation for this year, a total of 31 of the hedge funds we track were bullish in this stock, a change of -11% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings substantially.
Of the funds we track, Tiger Consumer Management, managed by Patrick McCormack, holds the most valuable position in Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT). Tiger Consumer Management has a $89 million position in the stock, comprising 4.2% of its 13F portfolio. The second largest stake is held by James H. Litinsk of JHL Capital Group, with a $81 million position; 4.2% of its 13F portfolio is allocated to the stock. Other peers with similar optimism include Steven Cohen’s SAC Capital Advisors, Jeffrey Furber’s AEW Capital Management and Mark T. Gallogly’s Centerbridge Partners.
Due to the fact that Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT) has witnessed declining sentiment from hedge fund managers, it’s safe to say that there lies a certain “tier” of fund managers that slashed their positions entirely heading into 2013. Intriguingly, John Murphy’s Alydar Capital cut the largest investment of all the hedgies we key on, valued at about $35 million in stock., and Richard Schimel of Diamondback Capital was right behind this move, as the fund sold off about $11 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 4 funds heading into 2013.
How have insiders been trading Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT)?
Insider buying is particularly usable when the primary stock in question has seen transactions within the past 180 days. Over the latest six-month time period, Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT) has experienced zero unique insiders buying, and 10 insider sales (see the details of insider trades here).
With the results shown by our time-tested strategies, retail investors should always watch hedge fund and insider trading activity, and Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT) is an important part of this process.
Click here to learn more about Insider Monkey’s Hedge Fund Newsletter
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.
