Pershing Square Believes Hilton Worldwide (HLT) has Long-Term Growth Potential

Pershing Square Holdings, an investment holding company, released its second quarter 2022 investor letter. A copy of the same can be downloaded here. The fund generated NAV performance of -26% at the end of the first half, which was slightly higher than the total shareholder returns of -27.3%. Through August 16, 2022, the fund returned -10.8% compared to a -8.8% return for the S&P 500 index. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.

Pershing Square Holdings discussed stocks like Hilton Worldwide Holdings Inc. (NYSE:HLT) in the second quarter investor letter. Headquartered in McLean, Virginia, Hilton Worldwide Holdings Inc. (NYSE:HLT) operates in the hospitality industry. On September 15, 2022, Hilton Worldwide Holdings Inc. (NYSE:HLT)  stock closed at $135.24 per share. One-month return of Hilton Worldwide Holdings Inc. (NYSE:HLT)  was -0.18% and its shares gained 3.07% of their value over the last 52 weeks. Hilton Worldwide Holdings Inc. (NYSE:HLT)  has a market capitalization of $37.095 billion.

Here is what Pershing Square Holdings specifically said about Hilton Worldwide Holdings Inc. (NYSE:HLT)  in its Q2 2022 investor letter:

“Hilton Worldwide Holdings Inc. (NYSE:HLT) is a high-quality, asset-light, high-margin business with significant long-term growth potential, led by a superb management team. The unforeseen arrival of the COVID-19 pandemic catalyzed a rapid and near-complete standstill in global travel, with RevPAR (the industry metric for same-store sales at a given hotel) down roughly 90% at the nadir of the pandemic. We increased our investment in Hilton during the pandemic as we believed the economic dislocation from COVID-19 would prove to be transient and that industry projections regarding the timeline for recovery were too pessimistic.

From the moment the pandemic began, Hilton’s management team took decisive actions to ensure the company not only managed through what it knew would be a challenging period, but also positioned the company to generate improved margins, cash flows, and investment returns once the business recovered. In hindsight, Hilton’s experience with COVID-19 – the 100-year proverbial flood – affirmed the company’s unique high-quality, asset light, high-margin business model, and reinforced our belief that Hilton deserves a premium valuation.

While Hilton entered 2022 impacted by the Omicron variant, results have vastly improved throughout the year as COVID-19 has evolved towards a more endemic virus, and consumer behavior has adapted accordingly. In recent months, Hilton’s system-wide RevPAR has surpassed 2019 levels and continues to improve. Recent strength has been led by domestic leisure travel occasions as consumer spending continues to shift from goods to services. …” (Click here to read the full text)

Hilton Worldwide Holdings Inc. (NYSE:HLT) is not on the list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 60 hedge fund portfolios were held by Hilton Worldwide Holdings Inc. (NYSE:HLT)  at the end of the second quarter which was 52 in the previous quarter.

We discussed Hilton Worldwide Holdings Inc. (NYSE:HLT)  in another article and shared the stock picks of billionaire Daniel Sundheim’s D1 Capital Partners. In addition, please check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other leading investors.

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