Hyatt Hotels Corporation (H): Hedge Fund Sentiment Unchanged

The Insider Monkey team has completed processing the quarterly 13F filings for the June quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Hyatt Hotels Corporation (NYSE:H).

Hedge fund interest in Hyatt Hotels Corporation (NYSE:H) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that H isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). At the end of this article we will also compare H to other stocks including Gold Fields Limited (NYSE:GFI), ITT Inc. (NYSE:ITT), and MasTec, Inc. (NYSE:MTZ) to get a better sense of its popularity.

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

Gabriel Plotkin of Melvin Capital Management

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. With all of this in mind let’s check out the latest hedge fund action encompassing Hyatt Hotels Corporation (NYSE:H).

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

At second quarter’s end, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the first quarter of 2020. By comparison, 27 hedge funds held shares or bullish call options in H a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Melvin Capital Management was the largest shareholder of Hyatt Hotels Corporation (NYSE:H), with a stake worth $283.4 million reported as of the end of June. Trailing Melvin Capital Management was Southeastern Asset Management, which amassed a stake valued at $269.3 million. Highside Global Management, Balyasny Asset Management, and Citadel Investment Group 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 Highside Global Management allocated the biggest weight to Hyatt Hotels Corporation (NYSE:H), around 7.89% of its 13F portfolio. Southeastern Asset Management is also relatively very bullish on the stock, designating 5.42 percent of its 13F equity portfolio to H.

Since Hyatt Hotels Corporation (NYSE:H) has experienced falling interest from the aggregate hedge fund industry, it’s safe to say that there were a few hedgies that decided to sell off their full holdings in the second quarter. It’s worth mentioning that Robert Pohly’s Samlyn Capital said goodbye to the largest position of the 750 funds followed by Insider Monkey, valued at close to $7.6 million in stock, and Karim Abbadi and Edward McBride’s Centiva Capital was right behind this move, as the fund sold off about $0.9 million worth. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Hyatt Hotels Corporation (NYSE:H) but similarly valued. These stocks are Gold Fields Limited (NYSE:GFI), ITT Inc. (NYSE:ITT), MasTec, Inc. (NYSE:MTZ), Lincoln Electric Holdings, Inc. (NASDAQ:LECO), New Fortress Energy Inc. (NASDAQ:NFE), Woodward Inc (NASDAQ:WWD), and Globus Medical Inc (NYSE:GMED). This group of stocks’ market caps match H’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 23.1 hedge funds with bullish positions and the average amount invested in these stocks was $325 million. That figure was $661 million in H’s case. MasTec, Inc. (NYSE:MTZ) is the most popular stock in this table. On the other hand New Fortress Energy Inc. (NASDAQ:NFE) is the least popular one with only 9 bullish hedge fund positions. Hyatt Hotels Corporation (NYSE:H) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for H is 46.5. 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. A small number of hedge funds were also right about betting on H as the stock returned 6.5% since the end of the second quarter (through 10/22) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.