Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Expedia Group Inc (NASDAQ:EXPE).
Expedia Group Inc (NASDAQ:EXPE) investors should be aware of an increase in support from the world’s most elite money managers recently. Expedia Group Inc (NASDAQ:EXPE) was in 86 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 76. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that EXPE isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Daniel Sundheim of D1 Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, advertising technology one of the fastest growing industries right now, so we are checking out stock pitches like this under-the-radar adtech stock that can deliver 10x gains. We go through lists like the 10 best hydrogen fuel cell 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 glance at the latest hedge fund action encompassing Expedia Group Inc (NASDAQ:EXPE).
Do Hedge Funds Think EXPE Is A Good Stock To Buy Now?
At first quarter’s end, a total of 86 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from the fourth quarter of 2020. By comparison, 41 hedge funds held shares or bullish call options in EXPE a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, D1 Capital Partners was the largest shareholder of Expedia Group Inc (NASDAQ:EXPE), with a stake worth $891.9 million reported as of the end of March. Trailing D1 Capital Partners was Melvin Capital Management, which amassed a stake valued at $877.8 million. PAR Capital Management, Altimeter Capital Management, and Alkeon 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 Tiger Legatus Capital allocated the biggest weight to Expedia Group Inc (NASDAQ:EXPE), around 17.89% of its 13F portfolio. PAR Capital Management is also relatively very bullish on the stock, setting aside 13.34 percent of its 13F equity portfolio to EXPE.
Consequently, key money managers have jumped into Expedia Group Inc (NASDAQ:EXPE) headfirst. Alkeon Capital Management, managed by Panayotis Takis Sparaggis, created the most valuable position in Expedia Group Inc (NASDAQ:EXPE). Alkeon Capital Management had $382.1 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also initiated a $134.2 million position during the quarter. The other funds with brand new EXPE positions are Doug Silverman and Alexander Klabin’s Senator Investment Group, John Khoury’s Long Pond Capital, and John Hurley’s Cavalry Asset Management.
Let’s go over hedge fund activity in other stocks similar to Expedia Group Inc (NASDAQ:EXPE). These stocks are Carnival Corporation & plc (NYSE:CUK), Maxim Integrated Products Inc. (NASDAQ:MXIM), DraftKings Inc. (NASDAQ:DKNG), Arthur J. Gallagher & Co. (NYSE:AJG), Nasdaq, Inc. (NASDAQ:NDAQ), The Clorox Company (NYSE:CLX), and AmerisourceBergen Corporation (NYSE:ABC). This group of stocks’ market caps resemble EXPE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CUK | 4 | 105412 | -3 |
| MXIM | 55 | 3238393 | 1 |
| DKNG | 43 | 966256 | -5 |
| AJG | 24 | 283959 | 0 |
| NDAQ | 22 | 236137 | -5 |
| CLX | 38 | 1195544 | -1 |
| ABC | 43 | 1177164 | -4 |
| Average | 32.7 | 1028981 | -2.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.7 hedge funds with bullish positions and the average amount invested in these stocks was $1029 million. That figure was $6157 million in EXPE’s case. Maxim Integrated Products Inc. (NASDAQ:MXIM) is the most popular stock in this table. On the other hand Carnival Corporation & plc (NYSE:CUK) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Expedia Group Inc (NASDAQ:EXPE) is more popular among hedge funds. Our overall hedge fund sentiment score for EXPE is 90. 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 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. Unfortunately EXPE wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on EXPE were disappointed as the stock returned 0.5% since the end of the first quarter (through 6/11) 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.
