Where Do Hedge Funds Stand On Vail Resorts, Inc. (MTN)?

Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Vail Resorts, Inc. (NYSE:MTN).

Vail Resorts, Inc. (NYSE:MTN) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 40 hedge funds’ portfolios at the end of the third quarter of 2021. Our calculations also showed that MTN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Suzano S.A. (NYSE:SUZ), GameStop Corp. (NYSE:GME), and Howmet Aerospace Inc. (NYSE:HWM) to gather more data points.

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. Keeping this in mind we’re going to take a look at the key hedge fund action encompassing Vail Resorts, Inc. (NYSE:MTN).

John Rogers of Ariel Investments

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

At third quarter’s end, a total of 40 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 30 hedge funds with a bullish position in MTN a year ago. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).

The largest stake in Vail Resorts, Inc. (NYSE:MTN) was held by Ariel Investments, which reported holding $87.5 million worth of stock at the end of September. It was followed by Select Equity Group with a $85.8 million position. Other investors bullish on the company included Candlestick Capital Management, Citadel Investment Group, and MSDC Management. In terms of the portfolio weights assigned to each position Aravt Global allocated the biggest weight to Vail Resorts, Inc. (NYSE:MTN), around 7.73% of its 13F portfolio. MSDC Management is also relatively very bullish on the stock, designating 2.76 percent of its 13F equity portfolio to MTN.

Since Vail Resorts, Inc. (NYSE:MTN) has witnessed a decline in interest from hedge fund managers, it’s safe to say that there were a few funds that decided to sell off their positions entirely last quarter. Interestingly, Matthew Stadelman’s Diamond Hill Capital sold off the biggest position of all the hedgies monitored by Insider Monkey, valued at close to $97.9 million in stock, and John Overdeck and David Siegel’s Two Sigma Advisors was right behind this move, as the fund sold off about $31.1 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Vail Resorts, Inc. (NYSE:MTN) but similarly valued. These stocks are Suzano S.A. (NYSE:SUZ), GameStop Corp. (NYSE:GME), Howmet Aerospace Inc. (NYSE:HWM), Futu Holdings Limited (NASDAQ:FUTU), Citrix Systems, Inc. (NASDAQ:CTXS), WestRock Company (NYSE:WRK), and Farfetch Limited (NYSE:FTCH). This group of stocks’ market values match MTN’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 27.3 hedge funds with bullish positions and the average amount invested in these stocks was $1290 million. That figure was $645 million in MTN’s case. Farfetch Limited (NYSE:FTCH) is the most popular stock in this table. On the other hand Suzano S.A. (NYSE:SUZ) is the least popular one with only 6 bullish hedge fund positions. Vail Resorts, Inc. (NYSE:MTN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MTN is 72.8. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately MTN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on MTN were disappointed as the stock returned -0.4% since the end of September (through 11/30) 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.