At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Tiger Global because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.
Is Tripadvisor Inc (NASDAQ:TRIP) a bargain? Prominent investors are reducing their bets on the stock. The number of long hedge fund bets were cut by 2 recently. Our calculations also showed that TRIP isn’t among the 30 most popular stocks among hedge funds.
In today’s marketplace there are a multitude of tools stock market investors have at their disposal to value publicly traded companies. Some of the most under-the-radar tools are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the elite money managers can outperform the market by a very impressive amount (see the details here).
Let’s take a peek at the recent hedge fund action regarding Tripadvisor Inc (NASDAQ:TRIP).
What have hedge funds been doing with Tripadvisor Inc (NASDAQ:TRIP)?
At Q1’s end, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of -7% from the fourth quarter of 2018. On the other hand, there were a total of 23 hedge funds with a bullish position in TRIP a year ago. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
Among these funds, Eagle Capital Management held the most valuable stake in Tripadvisor Inc (NASDAQ:TRIP), which was worth $459.2 million at the end of the first quarter. On the second spot was Bares Capital Management which amassed $230.9 million worth of shares. Moreover, AQR Capital Management, D E Shaw, and PAR Capital Management were also bullish on Tripadvisor Inc (NASDAQ:TRIP), allocating a large percentage of their portfolios to this stock.
Due to the fact that Tripadvisor Inc (NASDAQ:TRIP) has experienced declining sentiment from the entirety of the hedge funds we track, we can see that there were a few money managers who were dropping their entire stakes by the end of the third quarter. At the top of the heap, Israel Englander’s Millennium Management cut the biggest stake of all the hedgies monitored by Insider Monkey, valued at close to $94.2 million in stock. David Harding’s fund, Winton Capital Management, also cut its stock, about $10 million worth. These transactions are important to note, as total hedge fund interest dropped by 2 funds by the end of the third quarter.
Let’s also examine hedge fund activity in other stocks similar to Tripadvisor Inc (NASDAQ:TRIP). We will take a look at Columbia Sportswear Company (NASDAQ:COLM), Roku, Inc. (NASDAQ:ROKU), Cimarex Energy Co (NYSE:XEC), and Hill-Rom Holdings, Inc. (NYSE:HRC). All of these stocks’ market caps resemble TRIP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| COLM | 32 | 359364 | 8 |
| ROKU | 33 | 505452 | 7 |
| XEC | 30 | 1100137 | 2 |
| HRC | 29 | 621941 | 0 |
| Average | 31 | 646724 | 4.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31 hedge funds with bullish positions and the average amount invested in these stocks was $647 million. That figure was $1355 million in TRIP’s case. Roku, Inc. (NASDAQ:ROKU) is the most popular stock in this table. On the other hand Hill-Rom Holdings, Inc. (NYSE:HRC) is the least popular one with only 29 bullish hedge fund positions. Compared to these stocks Tripadvisor Inc (NASDAQ:TRIP) is even less popular than HRC. Hedge funds dodged a bullet by taking a bearish stance towards TRIP. Our calculations showed that the top 15 most popular hedge fund stocks returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately TRIP wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); TRIP investors were disappointed as the stock returned -16.4% during the same time frame and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in the second quarter.
Disclosure: None. This article was originally published at Insider Monkey.
