Here is What Hedge Funds Think About Marriott International Inc (MAR)

Hedge funds run by legendary names like Nelson Peltz and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant out-performance. That’s why we pay special attention to hedge fund activity in these stocks.

Marriott International Inc (NASDAQ:MAR) was in 29 hedge funds’ portfolios at the end of September. MAR shareholders have witnessed a decrease in enthusiasm from smart money lately. There were 31 hedge funds in our database with MAR holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Applied Materials, Inc. (NASDAQ:AMAT), Xcel Energy Inc (NYSE:XEL), and The Progressive Corporation (NYSE:PGR) to gather more data points.

With all of this in mind, we’re going to view the recent action regarding Marriott International Inc (NASDAQ:MAR).

What does the smart money think about Marriott International Inc (NASDAQ:MAR)?

At the end of the third quarter, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Tom Gayner’s Markel Gayner Asset Management has the biggest position in Marriott International Inc (NASDAQ:MAR), worth close to $97 million, accounting for 2.6% of its total 13F portfolio. Coming in second is Capital Growth Management, managed by Ken Heebner, which holds a $56.9 million position; the fund has 1.8% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism comprise Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, David Harding’s Winton Capital Management and John Overdeck and David Siegel’s Two Sigma Advisors.

Due to the fact that Marriott International Inc (NYSE:MAR) has faced declining sentiment from the aggregate hedge fund industry, it’s easy to see that there was a specific group of money managers who sold off their positions entirely last quarter. At the top of the heap, Malcolm Fairbairn’s Ascend Capital cut the biggest stake of the 700 funds watched by Insider Monkey, worth an estimated $94.4 million in stock. Louis Navellier’s fund, Navellier & Associates, also dropped its stock, about $21 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 2 funds last quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Marriott International Inc (NASDAQ:MAR) but similarly valued. These stocks are Applied Materials, Inc. (NASDAQ:AMAT), Xcel Energy Inc (NYSE:XEL), The Progressive Corporation (NYSE:PGR), and Baxter International Inc. (NYSE:BAX). All of these stocks’ market caps are similar to MAR’s market cap.

As you can see these stocks had an average of 35.25 hedge funds with bullish positions and the average amount invested in these stocks was $1,941 million. That figure was $494 million in MAR’s case. Applied Materials, Inc. (NASDAQ:AMAT) is the most popular stock in this table. On the other hand Xcel Energy Inc (NYSE:XEL) is the least popular one with only 10 bullish hedge fund positions. Marriott International Inc (NASDAQ:MAR) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard AMAT might be a better candidate to consider a long position.