Is Travelport Worldwide Ltd (TVPT) Going to Burn These Hedge Funds?

Many investors, including Carl Icahn or Stan Druckenmiller, have been saying for a while now that the current market is overvalued due to a low interest rate environment that leads to companies swapping their equity for debt and focusing mostly on short-term performance such as beating the quarterly earnings estimates. In the third quarter, many investors lost money due to unpredictable events such as the concerns over Valeant’s drug pricing policy that led to an overall drop among pharma stocks. Nevertheless, many of the stocks that tanked in the third quarter still sport strong fundamentals and their decline was more related to the general market sentiment rather than their individual performance and hedge funds kept their bullish stance. In this article we will find out how hedge fund sentiment to Travelport Worldwide Ltd (NYSE:TVPT) changed recently.

Travelport Worldwide Ltd (NYSE:TVPT) investors should be aware of a decrease in hedge fund interest of late. TVPT was in 21 hedge funds’ portfolios at the end of the third quarter of 2015. There were 23 hedge funds in our database with TVPT positions at the end of the previous quarter. At the end of this article we will also compare TVPT to other stocks, including Wageworks Inc (NYSE:WAGE), Astoria Financial Corp (NYSE:AF), and Gentherm Inc (NASDAQ:THRM) to get a better sense of its popularity.

According to most shareholders, hedge funds are seen as unimportant, outdated investment tools of the past. While there are over 8000 funds with their doors open today, Our researchers look at the crème de la crème of this group, around 700 funds. These investment experts command the lion’s share of the smart money’s total asset base, and by tracking their matchless investments, Insider Monkey has discovered numerous investment strategies that have historically outpaced the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy outstripped the S&P 500 index by 12 percentage points annually for a decade in their back tests.

Now, we’re going to take a gander at the new action regarding Travelport Worldwide Ltd (NYSE:TVPT).

What have hedge funds been doing with Travelport Worldwide Ltd (NYSE:TVPT)?

Heading into Q4, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 9% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, John M. Angelo and Michael L. Gordon’s Angelo Gordon & Co has the most valuable position in Travelport Worldwide Ltd (NYSE:TVPT), worth close to $201.4 million, corresponding to 14.8% of its total 13F portfolio. The second largest stake is held by Christopher Pucillo of Solus Alternative Asset Management, with a $91.2 million position; 13.7% of its 13F portfolio is allocated to the stock. Some other professional money managers with similar optimism consist of Kevin Michael Ulrich and Anthony Davis’s Anchorage Advisors, Geoffrey Raynor’s Q Investments (Specter Holdings) and Parag Vora’s HG Vora Capital Management.

Since Travelport Worldwide Ltd (NYSE:TVPT) has faced a declination in interest from the entirety of the hedge funds we track, we can see that there were a few hedge funds that decided to sell off their entire stakes last quarter. At the top of the heap, Frank Brosens’s Taconic Capital said goodbye to the largest stake of the “upper crust” of funds watched by Insider Monkey, totaling an estimated $9.4 million in stock, and Robert Millard’s Realm Partners was right behind this move, as the fund said goodbye to about $8.9 million worth of shares. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 2 funds last quarter.

Let’s also examine hedge fund activity in other stocks similar to Travelport Worldwide Ltd (NYSE:TVPT). We will take a look at Wageworks Inc (NYSE:WAGE), Astoria Financial Corp (NYSE:AF), Gentherm Inc (NASDAQ:THRM), and Fairchild Semiconductor Intl Inc (NYSE:FCS). All of these stocks’ market caps are closest to TVPT’s market cap.

As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $124 million. That figure was a whooping $655 million in TVPT’s case. Wageworks Inc (NYSE:WAGE) is the most popular stock in this table. On the other hand Fairchild Semiconductor Intl Inc (NYSE:FCS) is the least popular one with only 14 bullish hedge fund positions. Travelport Worldwide Ltd (NYSE:TVPT) clearly outshines them all, both in terms of the number of long hedge fund positions and the amount invested. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.