The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 817 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, about a month before the elections. In this article we look at what those investors think of Hilton Grand Vacations Inc. (NYSE:HGV).
Is HGV a good stock to buy? Hilton Grand Vacations Inc. (NYSE:HGV) investors should pay attention to an increase in activity from the world’s largest hedge funds in recent months. Hilton Grand Vacations Inc. (NYSE:HGV) was in 32 hedge funds’ portfolios at the end of September. The all time high for this statistic is 46. There were 30 hedge funds in our database with HGV positions at the end of the second quarter. Our calculations also showed that HGV isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Matthew Hulsizer of PEAK6 Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy to pick the best large-cap stocks to buy. 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 website. Now let’s check out the new hedge fund action encompassing Hilton Grand Vacations Inc. (NYSE:HGV).
Do Hedge Funds Think HGV Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 32 of the hedge funds tracked by Insider Monkey were long this stock, a change of 7% from the second quarter of 2020. On the other hand, there were a total of 43 hedge funds with a bullish position in HGV a year ago. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
More specifically, Zimmer Partners was the largest shareholder of Hilton Grand Vacations Inc. (NYSE:HGV), with a stake worth $135.3 million reported as of the end of September. Trailing Zimmer Partners was North Peak Capital, which amassed a stake valued at $110.2 million. P2 Capital Partners, Rima Senvest Management, and Long Pond Capital 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 North Peak Capital allocated the biggest weight to Hilton Grand Vacations Inc. (NYSE:HGV), around 21% of its 13F portfolio. P2 Capital Partners is also relatively very bullish on the stock, setting aside 6.73 percent of its 13F equity portfolio to HGV.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Bloom Tree Partners, managed by Alok Agrawal, created the most valuable position in Hilton Grand Vacations Inc. (NYSE:HGV). Bloom Tree Partners had $14.9 million invested in the company at the end of the quarter. James Thomas Berylson’s Berylson Capital Partners also made a $7.1 million investment in the stock during the quarter. The other funds with brand new HGV positions are Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, Matthew Hulsizer’s PEAK6 Capital Management, and Benjamin A. Smith’s Laurion Capital Management.
Let’s go over hedge fund activity in other stocks similar to Hilton Grand Vacations Inc. (NYSE:HGV). These stocks are B&G Foods, Inc. (NYSE:BGS), Dana Incorporated (NYSE:DAN), Empire State Realty Trust Inc (NYSE:ESRT), Herman Miller, Inc. (NASDAQ:MLHR), Commscope Holding Company Inc (NASDAQ:COMM), CNX Resources Corporation (NYSE:CNX), and Macy’s, Inc. (NYSE:M). This group of stocks’ market values are similar to HGV’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BGS | 15 | 37658 | 2 |
| DAN | 22 | 163106 | -3 |
| ESRT | 17 | 161290 | -2 |
| MLHR | 23 | 121547 | 1 |
| COMM | 30 | 482875 | -2 |
| CNX | 33 | 581481 | 5 |
| M | 28 | 363563 | -8 |
| Average | 24 | 273074 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $273 million. That figure was $576 million in HGV’s case. CNX Resources Corporation (NYSE:CNX) is the most popular stock in this table. On the other hand B&G Foods, Inc. (NYSE:BGS) is the least popular one with only 15 bullish hedge fund positions. Hilton Grand Vacations Inc. (NYSE:HGV) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HGV is 75.1. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. Hedge funds were also right about betting on HGV as the stock returned 44.1% since the end of Q3 (through 12/18) 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.
