HG Vora Capital Management is a New York city-based hedge fund led by its founder Parag Vora. The long/short hedge fund invests in companies with leveraged balance sheets or firms that are undergoing some kind of major change. Its main sectors include such diverse industries as lodging, gaming, real estate, leisure, retail, finance and travel. The fund, whose public equity portfolio was valued at $801.47 million as of March 31, added ten new stocks to that portfolio during the first quarter, while increasing its holdings in three others. As mentioned, many of Vora’s top picks are in the travel sector, and a number of his new purchases were travel-related heading into the second quarter and the approach of summer. We’ll look at those top new travel picks in this article, which are Tripadvisor Inc (NASDAQ:TRIP), Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) and Homeinns Hotel Group (ADR) (NASDAQ:HMIN).
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The first new travel stock of Vora’s is a stake in Massachusetts-based travel service company Tripadvisor Inc (NASDAQ:TRIP). Vora purchased 500,000 shares with a value of $41.59 million during the first quarter, with the holding now ranking as the fourth most valuable long position in his public portfolio. Tripadvisor Inc (NASDAQ:TRIP) has been experienced a slow spring on the NASDAQ, with a return of 1.2% year-to-date and is down by 8.5% during the past three months. Tripadvisor has been having a hard time convincing analysts of its worth, having continuously failed to meet analysts’ expectations, with the first quarter of the year being no different. Analysts are putting their hope on Tripadvisor having a good opportunity to reach new markets in Asia-Pacific where the market for online booking is growing. However, there is still cause for concern that the company’s earnings aren’t growing at a fast enough rate to keep with expanding costs, which are eating up revenue. Besides Vora, Ricky Sandler‘s Eminence Capital seems to believe that the travel broker has a turnaround in it, as he opened a new stake of his own, consisting of 2.45 million shares with a value of $203.35 million during the first quarter.
Vora also opened a new position in Chinese travel agency Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP), consisting of 600,000 shares with a value of $35.20 million. Unlike Tripadvisor, Ctrip.com has been having a brisk stretch on the stock exchange, returning 67.7% year-to-date and 74% during the last three months. A development that was by large part driven by the great results for the fourth quarter of 2014 that Ctrip.com posted in March, including a 33% increase in revenue. At the end of May, Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) also revealed that it had taken a stake of 38% in competitor Elong Inc., a move which analysts say might be a way to stop the fierce competition between the two firms, instead fostering a co-operative environment for them to jointly work together in the expanding Chinese travel market. The stock market did indeed like the new strategy and shares of Ctrip reached their all-time-high shortly after. We believe that Michael Doheny and his Freshford Capital Management also are happy regarding the new strategy, since they, like Parag Vora, took a stake in the travel agency during the first quarter of 428,464 shares with a value of $25.12 million.
Lastly, HG Vora opened a stake of 1.25 million shares with a value of $29.60 million in Homeinns Hotel Group (ADR) (NASDAQ:HMIN), an investment that seemingly has been quite good thus far, with a return of 9.3% year-to-date and 19.8% during the last week alone. That development was driven by the news last week that Homeinns Hotel Group (ADR) (NASDAQ:HMIN) was subject to a bid by none other than an investor group which includes Ctrip, to take China’s largest budget hotel chain private. The Shanghai-based hotel chain, operating since 2001, is expected to try and relist on either the Shanghai or Hong Kong stock exchanges, where it’s expected it would receive a greater valuation. Another investor holding a large stake in the Chinese hotel chain is Brett Barakett, representing Tremblant Capital, who owns 1.65 million shares with a value of $39.02 million.
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