Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT) was in 38 hedge funds’ portfolio at the end of the first quarter of 2013. HOT investors should be aware of an increase in activity from the world’s largest hedge funds recently. There were 34 hedge funds in our database with HOT positions at the end of the previous quarter.
According to most shareholders, hedge funds are seen as slow, outdated financial tools of the past. While there are greater than 8000 funds in operation at the moment, we hone in on the top tier of this group, around 450 funds. It is widely believed that this group has its hands on the majority of all hedge funds’ total capital, and by watching their top picks, we have formulated a number of investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Just as important, positive insider trading sentiment is another way to parse down the world of equities. Obviously, there are a number of incentives for an upper level exec to sell shares of his or her company, but just one, very obvious reason why they would behave bullishly. Plenty of academic studies have demonstrated the valuable potential of this tactic if investors understand what to do (learn more here).
Keeping this in mind, we’re going to take a glance at the recent action encompassing Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT).
How are hedge funds trading Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT)?
At the end of the first quarter, a total of 38 of the hedge funds we track were long in this stock, a change of 12% from the first quarter. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings substantially.
According to our comprehensive database, SAC Capital Advisors, managed by Steven Cohen, holds the biggest position in Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT). SAC Capital Advisors has a $117.5 million position in the stock, comprising 0.6% of its 13F portfolio. On SAC Capital Advisors’s heels is Jeffrey Vinik of Vinik Asset Management, with a $81 million position; the fund has 2.3% of its 13F portfolio invested in the stock. Other hedge funds that are bullish include Patrick McCormack’s Tiger Consumer Management, James H. Litinsky’s JHL Capital Group and Israel Englander’s Millennium Management.
As industrywide interest jumped, some big names were leading the bulls’ herd. Corvex Capital, managed by Keith Meister, assembled the most outsized call position in Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT). Corvex Capital had 31.9 million invested in the company at the end of the quarter. Abby Flamholz and Yehuda Blinder’s ADAR Investment Management also initiated a $18.1 million position during the quarter. The other funds with brand new HOT positions are John Wu’s Sureview Capital, John Murphy’s Alydar Capital, and David Costen Haley’s HBK Investments.
What have insiders been doing with Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT)?
Bullish insider trading is best served when the primary stock in question has seen transactions within the past 180 days. Over the latest half-year time period, Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT) has seen zero unique insiders purchasing, and 12 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT). These stocks are Hyatt Hotels Corporation (NYSE:H), Expedia Inc (NASDAQ:EXPE), InterContinental Hotels Group PLC (ADR) (NYSE:IHG), Wyndham Worldwide Corporation (NYSE:WYN), and Marriott International Inc (NYSE:MAR). All of these stocks are in the lodging industry and their market caps are closest to HOT’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Hyatt Hotels Corporation (NYSE:H) | 17 | 0 | 3 |
| Expedia Inc (NASDAQ:EXPE) | 32 | 1 | 2 |
| InterContinental Hotels Group PLC (ADR) (NYSE:IHG) | 10 | 0 | 0 |
| Wyndham Worldwide Corporation (NYSE:WYN) | 33 | 0 | 9 |
| Marriott International Inc (NYSE:MAR) | 22 | 0 | 13 |
With the returns demonstrated by the aforementioned research, retail investors must always monitor hedge fund and insider trading activity, and Starwood Hotels & Resorts Worldwide, Inc (NYSE:HOT) shareholders fit into this picture quite nicely.
