After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of March 31st. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Hawaiian Holdings, Inc. (NASDAQ:HA).
Is Hawaiian Holdings, Inc. (NASDAQ:HA) an excellent stock to buy now? The smart money was buying. The number of long hedge fund bets improved by 5 recently. Hawaiian Holdings, Inc. (NASDAQ:HA) was in 16 hedge funds’ portfolios at the end of March. The all time high for this statistic is 25. Our calculations also showed that HA isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 11 hedge funds in our database with HA positions at the end of the fourth quarter.
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. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. 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 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Martin Whitman of Third Avenue Management
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Do Hedge Funds Think HA Is A Good Stock To Buy Now?
At Q1’s end, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 45% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in HA over the last 23 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
The largest stake in Hawaiian Holdings, Inc. (NASDAQ:HA) was held by Millennium Management, which reported holding $36.2 million worth of stock at the end of December. It was followed by Third Avenue Management with a $27.4 million position. Other investors bullish on the company included Highline Capital Management, Citadel Investment Group, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Highline Capital Management allocated the biggest weight to Hawaiian Holdings, Inc. (NASDAQ:HA), around 10.15% of its 13F portfolio. Third Avenue Management is also relatively very bullish on the stock, setting aside 3.62 percent of its 13F equity portfolio to HA.
As aggregate interest increased, key money managers were breaking ground themselves. Highline Capital Management, managed by Jacob Doft, assembled the biggest position in Hawaiian Holdings, Inc. (NASDAQ:HA). Highline Capital Management had $14.9 million invested in the company at the end of the quarter. Thomas E. Claugus’s GMT Capital also made a $3.5 million investment in the stock during the quarter. The following funds were also among the new HA investors: Jack Ripsteen’s Potrero Capital Research, Gilchrist Berg’s Water Street Capital, and Michael Hintze’s CQS Cayman LP.
Let’s also examine hedge fund activity in other stocks similar to Hawaiian Holdings, Inc. (NASDAQ:HA). These stocks are City Holding Company (NASDAQ:CHCO), Home Point Capital Inc. (NASDAQ:HMPT), Tootsie Roll Industries, Inc. (NYSE:TR), Enova International Inc (NYSE:ENVA), Comstock Resources Inc (NYSE:CRK), NV5 Global Inc (NASDAQ:NVEE), and StoneX Group Inc. (NASDAQ:SNEX). This group of stocks’ market values resemble HA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CHCO | 5 | 16561 | -1 |
| HMPT | 13 | 35611 | 13 |
| TR | 14 | 34793 | 0 |
| ENVA | 21 | 251127 | 1 |
| CRK | 14 | 75581 | -8 |
| NVEE | 16 | 62776 | 6 |
| SNEX | 9 | 121498 | -3 |
| Average | 13.1 | 85421 | 1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.1 hedge funds with bullish positions and the average amount invested in these stocks was $85 million. That figure was $109 million in HA’s case. Enova International Inc (NYSE:ENVA) is the most popular stock in this table. On the other hand City Holding Company (NASDAQ:CHCO) is the least popular one with only 5 bullish hedge fund positions. Hawaiian Holdings, Inc. (NASDAQ:HA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HA is 63.6. 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 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 28.5% in 2021 through July 23rd and beat the market again by 10.1 percentage points. Unfortunately HA wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on HA were disappointed as the stock returned -26.2% since the end of March (through 7/23) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
