Is TCOM Stock A Buy or Sell?

With the fourth-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the first quarter of 2021. One of these stocks was Trip.com Group Limited (NASDAQ:TCOM).

Is TCOM stock a buy? Trip.com Group Limited (NASDAQ:TCOM) was in 34 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 67. TCOM has seen an increase in enthusiasm from smart money recently. There were 30 hedge funds in our database with TCOM positions at the end of the third quarter. Our calculations also showed that TCOM isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

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 124 percentage points since March 2017 (see the details here).

Kerr Neilson of Platinum Asset Management

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

At the end of the fourth quarter, a total of 34 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from the previous quarter. The graph below displays the number of hedge funds with bullish position in TCOM over the last 22 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

Among these funds, Fisher Asset Management held the most valuable stake in Trip.com Group Limited (NASDAQ:TCOM), which was worth $342.1 million at the end of the fourth quarter. On the second spot was Platinum Asset Management which amassed $264.4 million worth of shares. Renaissance Technologies, Pzena Investment Management, and Kontiki 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 Kontiki Capital allocated the biggest weight to Trip.com Group Limited (NASDAQ:TCOM), around 18.2% of its 13F portfolio. Broad Peak Investment Holdings is also relatively very bullish on the stock, earmarking 8.05 percent of its 13F equity portfolio to TCOM.

As industrywide interest jumped, some big names have been driving this bullishness. Antipodes Partners, managed by Jacob Mitchell, assembled the largest position in Trip.com Group Limited (NASDAQ:TCOM). Antipodes Partners had $67.8 million invested in the company at the end of the quarter. Eli Cohen’s Crescent Park Management also initiated a $8.8 million position during the quarter. The other funds with new positions in the stock are Tor Minesuk’s Mondrian Capital, Michael Gelband’s ExodusPoint Capital, and Greg Eisner’s Engineers Gate Manager.

Let’s now review hedge fund activity in other stocks similar to Trip.com Group Limited (NASDAQ:TCOM). These stocks are Entergy Corporation (NYSE:ETR), AmerisourceBergen Corporation (NYSE:ABC), EXACT Sciences Corporation (NASDAQ:EXAS), Teradyne, Inc. (NASDAQ:TER), POSCO (NYSE:PKX), Laboratory Corp. of America Holdings (NYSE:LH), and Vulcan Materials Company (NYSE:VMC). This group of stocks’ market caps match TCOM’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 41.4 hedge funds with bullish positions and the average amount invested in these stocks was $1167 million. That figure was $1668 million in TCOM’s case. Laboratory Corp. of America Holdings (NYSE:LH) is the most popular stock in this table. On the other hand POSCO (NYSE:PKX) is the least popular one with only 10 bullish hedge fund positions. Trip.com Group Limited (NASDAQ:TCOM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for TCOM is 45.7. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 7.9% in 2021 through April 1st and still beat the market by 0.4 percentage points. A small number of hedge funds were also right about betting on TCOM as the stock returned 19% since the end of the fourth quarter (through 4/1) and outperformed the market by an even larger margin.

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