Investing in small cap stocks has historically been a way to outperform the market, as small cap companies typically grow faster on average than the blue chips. That outperformance comes with a price, however, as there are occasional periods of higher volatility. The time period between June 25 and the end of October was one of those periods, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points. Given that the funds we track tend to have a disproportionate amount of their portfolios in smaller cap stocks, they have seen some volatility in their portfolios too. Actually their moves are potentially one of the factors that contributed to this volatility. In this article, we use our extensive database of hedge fund holdings to find out what the smart money thinks of Hilton Worldwide Holdings Inc (NYSE:HLT).
Hedge fund interest in Hilton Worldwide Holdings Inc (NYSE:HLT) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare HLT to other stocks including Discover Financial Services (NYSE:DFS), Waste Management, Inc. (NYSE:WM), and Activision Blizzard, Inc. (NASDAQ:ATVI) to get a better sense of its popularity.
Follow Hilton Worldwide Holdings Inc. (NYSE:HLT)
Follow Hilton Worldwide Holdings Inc. (NYSE:HLT)
In the 21st-century investor’s toolkit, there are many methods stock traders have at their disposal to analyze their stock investments. Two of the less utilized methods are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the top hedge fund managers can outpace their index-focused peers by a superb margin (see the details here).
Now, we’re going to view the latest action surrounding Hilton Worldwide Holdings Inc (NYSE:HLT).
Hedge fund activity in Hilton Worldwide Holdings Inc (NYSE:HLT)
Heading into Q4, a total of 51 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exist a few noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Viking Global, managed by Andreas Halvorsen, holds the largest position in Hilton Worldwide Holdings Inc (NYSE:HLT). Viking Global has a $351.6 million position in the stock, comprising 1.3% of its 13F portfolio. On Viking Global’s heels is Clifford Fox of Columbus Circle Investors, with a $113 million position; 0.9% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that are bullish encompass John Khoury’s Long Pond Capital, Joshua Friedman and Mitchell Julis’s Canyon Capital Advisors and D. E. Shaw’s D E Shaw.
Judging by the fact that Hilton Worldwide Holdings Inc (NYSE:HLT) has experienced a declination in interest from hedge fund managers, we can see that there exist a select few hedge funds who sold off their full holdings in the third quarter. At the top of the heap, Ben Gambill’s Tiger Eye Capital said goodbye to the biggest investment of the “upper crust” of funds followed by Insider Monkey, valued at close to $33 million in stock. Mark Kingdon’s fund, Kingdon Capital, also sold off its stock, about $28.3 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Hilton Worldwide Holdings Inc (NYSE:HLT) but similarly valued. We will take a look at Discover Financial Services (NYSE:DFS), Waste Management, Inc. (NYSE:WM), Activision Blizzard, Inc. (NASDAQ:ATVI), and Fiat Chrysler Automobiles NV (NYSE:FCAU). This group of stocks’ market values are closest to HLT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DFS | 52 | 1900604 | 7 |
| WM | 31 | 1359476 | 0 |
| ATVI | 43 | 2087134 | -3 |
| FCAU | 34 | 1179659 | -1 |
As you can see these stocks had an average of 40 hedge funds with bullish positions and the average amount invested in these stocks was $1632 million. That figure was $1488 million in HLT’s case. Discover Financial Services (NYSE:DFS) is the most popular stock in this table. On the other hand Waste Management, Inc. (NYSE:WM) is the least popular one with only 31 bullish hedge fund positions. Hilton Worldwide Holdings Inc (NYSE:HLT) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are most collectively bullish on, such as DFS, which might be a better candidate to consider a long position, in this particular group.
