Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the second quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of Ryman Hospitality Properties, Inc. (NYSE:RHP) based on that data and determine whether they were really smart about the stock.
Is Ryman Hospitality Properties, Inc. (NYSE:RHP) a sound stock to buy now? Money managers were taking a pessimistic view. The number of long hedge fund positions were cut by 1 in recent months. Ryman Hospitality Properties, Inc. (NYSE:RHP) was in 25 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 30. Our calculations also showed that RHP isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). There were 26 hedge funds in our database with RHP holdings at the end of March.
Video: Watch our video about the top 5 most popular hedge fund stocks.
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 56 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 34% through August 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Ricky Sandler of Eminence Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 to get excerpts of these letters in your inbox. Now we’re going to take a gander at the latest hedge fund action encompassing Ryman Hospitality Properties, Inc. (NYSE:RHP).
What have hedge funds been doing with Ryman Hospitality Properties, Inc. (NYSE:RHP)?
Heading into the third quarter of 2020, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from the previous quarter. On the other hand, there were a total of 21 hedge funds with a bullish position in RHP a year ago. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
More specifically, Eminence Capital was the largest shareholder of Ryman Hospitality Properties, Inc. (NYSE:RHP), with a stake worth $132.5 million reported as of the end of September. Trailing Eminence Capital was GAMCO Investors, which amassed a stake valued at $59.8 million. Echo Street Capital Management, Long Pond Capital, and Renaissance Technologies 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 Empirical Capital Partners allocated the biggest weight to Ryman Hospitality Properties, Inc. (NYSE:RHP), around 1.97% of its 13F portfolio. Eminence Capital is also relatively very bullish on the stock, designating 1.31 percent of its 13F equity portfolio to RHP.
Judging by the fact that Ryman Hospitality Properties, Inc. (NYSE:RHP) has faced declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there were a few fund managers that slashed their full holdings by the end of the second quarter. It’s worth mentioning that Eduardo Abush’s Waterfront Capital Partners sold off the biggest investment of the “upper crust” of funds monitored by Insider Monkey, worth close to $6.7 million in stock. Paul Reeder and Edward Shapiro’s fund, PAR Capital Management, also sold off its stock, about $4.6 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds by the end of the second quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Ryman Hospitality Properties, Inc. (NYSE:RHP) but similarly valued. These stocks are Masonite International Corp (NYSE:DOOR), Innospec Inc. (NASDAQ:IOSP), Albany International Corp. (NYSE:AIN), Tenet Healthcare Corp (NYSE:THC), Prospect Capital Corporation (NASDAQ:PSEC), Cardlytics, Inc. (NASDAQ:CDLX), and Prestige Consumer Healthcare Inc. (NYSE:PBH). This group of stocks’ market valuations resemble RHP’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DOOR | 27 | 425530 | 1 |
| IOSP | 18 | 89989 | 4 |
| AIN | 19 | 46345 | 1 |
| THC | 28 | 582586 | -7 |
| PSEC | 7 | 22588 | -1 |
| CDLX | 27 | 588778 | 1 |
| PBH | 20 | 118784 | 3 |
| Average | 20.9 | 267800 | 0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.9 hedge funds with bullish positions and the average amount invested in these stocks was $268 million. That figure was $311 million in RHP’s case. Tenet Healthcare Corp (NYSE:THC) is the most popular stock in this table. On the other hand Prospect Capital Corporation (NASDAQ:PSEC) is the least popular one with only 7 bullish hedge fund positions. Ryman Hospitality Properties, Inc. (NYSE:RHP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for RHP is 71.9. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 21.3% in 2020 through September 25th and beat the market by 17.7 percentage points. Unfortunately RHP wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on RHP were disappointed as the stock returned 5.7% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.
