Here is What Hedge Funds Think About Wyndham Hotels & Resorts, Inc. (WH)

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Wyndham Hotels & Resorts, Inc. (NYSE:WH).

Hedge fund interest in Wyndham Hotels & Resorts, Inc. (NYSE:WH) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that WH isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). 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 First Industrial Realty Trust, Inc. (NYSE:FR), InVitae Corporation (NYSE:NVTA), and OGE Energy Corp. (NYSE:OGE) to gather more data points.

To the average investor there are plenty of metrics stock market investors can use to evaluate publicly traded companies. Two of the best metrics 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 trounce the market by a solid 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.

Jeffrey Gates of Gates Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium 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. Keeping this in mind we’re going to analyze the key hedge fund action regarding Wyndham Hotels & Resorts, Inc. (NYSE:WH).

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

At the end of the second quarter, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. By comparison, 36 hedge funds held shares or bullish call options in WH 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.

The largest stake in Wyndham Hotels & Resorts, Inc. (NYSE:WH) was held by Gates Capital Management, which reported holding $138.9 million worth of stock at the end of June. It was followed by Citadel Investment Group with a $104.1 million position. Other investors bullish on the company included Impactive Capital, Arrowstreet Capital, and Long Pond Capital. In terms of the portfolio weights assigned to each position East Side Capital (RR Partners) allocated the biggest weight to Wyndham Hotels & Resorts, Inc. (NYSE:WH), around 7.63% of its 13F portfolio. Impactive Capital is also relatively very bullish on the stock, designating 6.72 percent of its 13F equity portfolio to WH.

Since Wyndham Hotels & Resorts, Inc. (NYSE:WH) has faced a decline in interest from the aggregate hedge fund industry, we can see that there lies a certain “tier” of money managers who sold off their full holdings by the end of the second quarter. It’s worth mentioning that Craig Peskin and Peter Fleiss’s Solel Partners dropped the biggest investment of the 750 funds monitored by Insider Monkey, totaling close to $15.3 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund said goodbye to about $5.7 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Wyndham Hotels & Resorts, Inc. (NYSE:WH) but similarly valued. We will take a look at First Industrial Realty Trust, Inc. (NYSE:FR), InVitae Corporation (NYSE:NVTA), OGE Energy Corp. (NYSE:OGE), Sonoco Products Company (NYSE:SON), Emcor Group Inc (NYSE:EME), Lemonade, Inc. (NYSE:LMND), and Pinnacle Financial Partners, Inc. (NASDAQ:PNFP). This group of stocks’ market values are similar to WH’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 19.1 hedge funds with bullish positions and the average amount invested in these stocks was $464 million. That figure was $801 million in WH’s case. InVitae Corporation (NYSE:NVTA) is the most popular stock in this table. On the other hand Pinnacle Financial Partners, Inc. (NASDAQ:PNFP) is the least popular one with only 13 bullish hedge fund positions. Wyndham Hotels & Resorts, Inc. (NYSE:WH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for WH is 51.9. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on WH as the stock returned 13.8% since the end of Q2 (through 10/22) 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.