In this article we will take a look at whether hedge funds think Ashford Hospitality Trust, Inc. (NYSE:AHT) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Ashford Hospitality Trust, Inc. (NYSE:AHT) was in 7 hedge funds’ portfolios at the end of March. AHT has experienced a decrease in hedge fund sentiment lately. There were 9 hedge funds in our database with AHT holdings at the end of the previous quarter. Our calculations also showed that AHT isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are several methods shareholders employ to assess stocks. A duo of the most under-the-radar methods are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the top investment managers can beat the market by a very impressive amount (see the details here).
James Dondero of Highland Capital Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to view the new hedge fund action surrounding Ashford Hospitality Trust, Inc. (NYSE:AHT).
What have hedge funds been doing with Ashford Hospitality Trust, Inc. (NYSE:AHT)?
At Q1’s end, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -22% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards AHT over the last 18 quarters. 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 stakes significantly (or already accumulated large positions).
The largest stake in Ashford Hospitality Trust, Inc. (NYSE:AHT) was held by Renaissance Technologies, which reported holding $5.2 million worth of stock at the end of September. It was followed by AQR Capital Management with a $0.6 million position. Other investors bullish on the company included Two Sigma Advisors, D E Shaw, and Highland Capital Management. In terms of the portfolio weights assigned to each position Highland Capital Management allocated the biggest weight to Ashford Hospitality Trust, Inc. (NYSE:AHT), around 0.02% of its 13F portfolio. Tudor Investment Corp is also relatively very bullish on the stock, dishing out 0.01 percent of its 13F equity portfolio to AHT.
Judging by the fact that Ashford Hospitality Trust, Inc. (NYSE:AHT) has witnessed a decline in interest from the smart money, it’s safe to say that there lies a certain “tier” of funds who sold off their entire stakes in the first quarter. Intriguingly, Ken Griffin’s Citadel Investment Group said goodbye to the biggest investment of all the hedgies followed by Insider Monkey, totaling an estimated $0.6 million in stock. Michael Platt and William Reeves’s fund, BlueCrest Capital Mgmt., also dumped its stock, about $0 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 2 funds in the first quarter.
Let’s also examine hedge fund activity in other stocks similar to Ashford Hospitality Trust, Inc. (NYSE:AHT). We will take a look at Eastman Kodak Co. (NYSE:KODK), Limestone Bancorp, Inc. (NASDAQ:LMST), BioNTech US Inc. (NASDAQ:NTGN), and Maiden Holdings, Ltd. (NASDAQ:MHLD). This group of stocks’ market values are similar to AHT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KODK | 6 | 9987 | -1 |
| LMST | 3 | 6198 | -1 |
| NTGN | 4 | 5691 | 1 |
| MHLD | 7 | 8978 | 0 |
| Average | 5 | 7714 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $8 million. That figure was $6 million in AHT’s case. Maiden Holdings, Ltd. (NASDAQ:MHLD) is the most popular stock in this table. On the other hand Limestone Bancorp, Inc. (NASDAQ:LMST) is the least popular one with only 3 bullish hedge fund positions. Ashford Hospitality Trust, Inc. (NYSE:AHT) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but still beat the market by 14.2 percentage points. Hedge funds were also right about betting on AHT as the stock returned 44.6% in Q2 (through June 10th) 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.
