Is WH Stock A Buy or Sell?

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 have processed the filings of the more than 887 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their December 31st holdings, data that is available nowhere else. Should you consider Wyndham Hotels & Resorts, Inc. (NYSE:WH) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Is WH stock a buy? Wyndham Hotels & Resorts, Inc. (NYSE:WH) investors should pay attention to a decrease in hedge fund interest lately. Wyndham Hotels & Resorts, Inc. (NYSE:WH) was in 26 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 44. Our calculations also showed that WH 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).

Ken Griffin of Citadel Investment Group

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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. With all of this in mind let’s take a look at the new hedge fund action regarding Wyndham Hotels & Resorts, Inc. (NYSE:WH).

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

At the end of December, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -21% from the third quarter of 2020. The graph below displays the number of hedge funds with bullish position in WH over the last 22 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Long Pond Capital was the largest shareholder of Wyndham Hotels & Resorts, Inc. (NYSE:WH), with a stake worth $129.9 million reported as of the end of December. Trailing Long Pond Capital was Citadel Investment Group, which amassed a stake valued at $68.9 million. Tremblant Capital, Impactive Capital, and East Side Capital (RR Partners) 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 Impactive Capital allocated the biggest weight to Wyndham Hotels & Resorts, Inc. (NYSE:WH), around 11.32% of its 13F portfolio. East Side Capital (RR Partners) is also relatively very bullish on the stock, earmarking 8.57 percent of its 13F equity portfolio to WH.

Seeing as Wyndham Hotels & Resorts, Inc. (NYSE:WH) has experienced bearish sentiment from hedge fund managers, it’s easy to see that there lies a certain “tier” of hedgies who were dropping their full holdings heading into Q1. At the top of the heap, Anand Parekh’s Alyeska Investment Group sold off the biggest stake of all the hedgies followed by Insider Monkey, totaling about $37 million in stock. Eduardo Abush’s fund, Waterfront Capital Partners, also cut its stock, about $11 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 7 funds heading into Q1.

Let’s check out hedge fund activity in other stocks similar to Wyndham Hotels & Resorts, Inc. (NYSE:WH). We will take a look at Science Applications International Corp (NYSE:SAIC), Schrodinger, Inc. (NASDAQ:SDGR), Starwood Property Trust, Inc. (NYSE:STWD), People’s United Financial, Inc. (NASDAQ:PBCT), Cullen/Frost Bankers, Inc. (NYSE:CFR), Integra Lifesciences Holdings Corp (NASDAQ:IART), and Eastgroup Properties Inc (NYSE:EGP). This group of stocks’ market valuations match WH’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 19.6 hedge funds with bullish positions and the average amount invested in these stocks was $247 million. That figure was $667 million in WH’s case. People’s United Financial, Inc. (NASDAQ:PBCT) is the most popular stock in this table. On the other hand Starwood Property Trust, Inc. (NYSE:STWD) is the least popular one with only 13 bullish hedge fund positions. Wyndham Hotels & Resorts, Inc. (NYSE:WH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for WH is 56.4. 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 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. Hedge funds were also right about betting on WH as the stock returned 24.8% since the end of Q4 (through 4/19) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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