Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in Expedia Group Inc (NASDAQ:EXPE)? The smart money sentiment can provide an answer to this question.
Expedia Group Inc (NASDAQ:EXPE) has seen an increase in support from the world’s most elite money managers recently. Expedia Group Inc (NASDAQ:EXPE) was in 86 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 76. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that EXPE isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the 21st century investor’s toolkit there are numerous formulas market participants put to use to value publicly traded companies. Some of the less utilized formulas are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the best hedge fund managers can outclass the S&P 500 by a significant amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Brad Gerstner of Altimeter Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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 homepage. Now let’s take a peek at the key hedge fund action surrounding Expedia Group Inc (NASDAQ:EXPE).
Do Hedge Funds Think EXPE Is A Good Stock To Buy Now?
At the end of March, a total of 86 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from the fourth quarter of 2020. On the other hand, there were a total of 41 hedge funds with a bullish position in EXPE a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Daniel Sundheim’s D1 Capital Partners has the biggest position in Expedia Group Inc (NASDAQ:EXPE), worth close to $891.9 million, corresponding to 6.6% of its total 13F portfolio. On D1 Capital Partners’s heels is Melvin Capital Management, led by Gabriel Plotkin, holding a $877.8 million position; the fund has 5% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Paul Reeder and Edward Shapiro’s PAR Capital Management, Brad Gerstner’s Altimeter Capital Management and Panayotis Takis Sparaggis’s Alkeon Capital Management. In terms of the portfolio weights assigned to each position Tiger Legatus Capital allocated the biggest weight to Expedia Group Inc (NASDAQ:EXPE), around 17.89% of its 13F portfolio. PAR Capital Management is also relatively very bullish on the stock, setting aside 13.34 percent of its 13F equity portfolio to EXPE.
Now, specific money managers were leading the bulls’ herd. Alkeon Capital Management, managed by Panayotis Takis Sparaggis, assembled the most valuable position in Expedia Group Inc (NASDAQ:EXPE). Alkeon Capital Management had $382.1 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also made a $134.2 million investment in the stock during the quarter. The following funds were also among the new EXPE investors: Doug Silverman and Alexander Klabin’s Senator Investment Group, John Khoury’s Long Pond Capital, and John Hurley’s Cavalry Asset Management.
Let’s go over hedge fund activity in other stocks similar to Expedia Group Inc (NASDAQ:EXPE). We will take a look at Carnival Corporation & plc (NYSE:CUK), Maxim Integrated Products Inc. (NASDAQ:MXIM), DraftKings Inc. (NASDAQ:DKNG), Arthur J. Gallagher & Co. (NYSE:AJG), Nasdaq, Inc. (NASDAQ:NDAQ), The Clorox Company (NYSE:CLX), and AmerisourceBergen Corporation (NYSE:ABC). This group of stocks’ market caps are similar to EXPE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CUK | 4 | 105412 | -3 |
| MXIM | 55 | 3238393 | 1 |
| DKNG | 43 | 966256 | -5 |
| AJG | 24 | 283959 | 0 |
| NDAQ | 22 | 236137 | -5 |
| CLX | 38 | 1195544 | -1 |
| ABC | 43 | 1177164 | -4 |
| Average | 32.7 | 1028981 | -2.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.7 hedge funds with bullish positions and the average amount invested in these stocks was $1029 million. That figure was $6157 million in EXPE’s case. Maxim Integrated Products Inc. (NASDAQ:MXIM) is the most popular stock in this table. On the other hand Carnival Corporation & plc (NYSE:CUK) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Expedia Group Inc (NASDAQ:EXPE) is more popular among hedge funds. Our overall hedge fund sentiment score for EXPE is 90. 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 gained 25.8% in 2021 through August 6th and still beat the market by 6.7 percentage points. Unfortunately EXPE wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on EXPE were disappointed as the stock returned -13.5% since the end of the first quarter (through 8/6) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
