Was The Smart Money Right About Hyatt Hotels Corporation (H)?

Stocks, especially the once high flying technology stocks, had a lousy start to the new year. QQQ lost 9% of its value in January. We aren’t certain about the bubbly technology stocks that trade for ridiculously high multiples of their revenues, but we believe top hedge fund stocks will deliver positive returns for the rest of the year. In this article, we will take a closer look at hedge fund sentiment towards Hyatt Hotels Corporation (NYSE:H) at the end of the third quarter and determine whether the smart money was really smart about this stock.

Hyatt Hotels Corporation (NYSE:H) investors should be aware of an increase in hedge fund sentiment lately. Hyatt Hotels Corporation (NYSE:H) was in 37 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 38. There were 23 hedge funds in our database with H holdings at the end of June. Our calculations also showed that H isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

Mason Hawkins of Southeastern Asset Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to take a look at the key hedge fund action encompassing Hyatt Hotels Corporation (NYSE:H).

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

At Q3’s end, a total of 37 of the hedge funds tracked by Insider Monkey were long this stock, a change of 61% from one quarter earlier. On the other hand, there were a total of 26 hedge funds with a bullish position in H a year ago. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Melvin Capital Management, managed by Gabriel Plotkin, holds the most valuable position in Hyatt Hotels Corporation (NYSE:H). Melvin Capital Management has a $354.7 million position in the stock, comprising 1.8% of its 13F portfolio. The second largest stake is held by Southeastern Asset Management, led by Mason Hawkins, holding a $315.7 million position; the fund has 6% of its 13F portfolio invested in the stock. Some other professional money managers that hold long positions encompass John Khoury’s Long Pond Capital, Dmitry Balyasny’s Balyasny Asset Management and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Highside Global Management allocated the biggest weight to Hyatt Hotels Corporation (NYSE:H), around 8.2% of its 13F portfolio. Southeastern Asset Management is also relatively very bullish on the stock, setting aside 5.99 percent of its 13F equity portfolio to H.

Consequently, key hedge funds have jumped into Hyatt Hotels Corporation (NYSE:H) headfirst. Long Pond Capital, managed by John Khoury, created the most valuable position in Hyatt Hotels Corporation (NYSE:H). Long Pond Capital had $50.4 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also initiated a $32.3 million position during the quarter. The other funds with new positions in the stock are Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Joseph Samuels’s Islet Management, and Frank Fu’s CaaS Capital.

Let’s now take a look at hedge fund activity in other stocks similar to Hyatt Hotels Corporation (NYSE:H). We will take a look at IPG Photonics Corporation (NASDAQ:IPGP), DXC Technology Company (NYSE:DXC), Bright Horizons Family Solutions Inc (NYSE:BFAM), Gerdau SA (NYSE:GGB), Aramark (NYSE:ARMK), MKS Instruments, Inc. (NASDAQ:MKSI), and SEI Investments Company (NASDAQ:SEIC). All of these stocks’ market caps match H’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $472 million. That figure was $1003 million in H’s case. DXC Technology Company (NYSE:DXC) is the most popular stock in this table. On the other hand Gerdau SA (NYSE:GGB) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Hyatt Hotels Corporation (NYSE:H) is more popular among hedge funds. Our overall hedge fund sentiment score for H is 89.2. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks returned 29.6% in 2021 and managed to beat the market by another 3.6 percentage points. Hedge funds were also right about betting on H as the stock returned 18.8% since the end of September (through 1/31) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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

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