We at Insider Monkey have gone over 752 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of Wyndham Hotels & Resorts, Inc. (NYSE:WH) based on that data.
Is Wyndham Hotels & Resorts, Inc. (NYSE:WH) ready to rally soon? Money managers are reducing their bets on the stock. The number of long hedge fund positions dropped by 4 lately. Our calculations also showed that WH isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). WH was in 36 hedge funds’ portfolios at the end of the third quarter of 2019. There were 40 hedge funds in our database with WH positions at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Clint Carlson of Carlson Capital
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. We’re going to go over the new hedge fund action encompassing Wyndham Hotels & Resorts, Inc. (NYSE:WH).
What have hedge funds been doing with Wyndham Hotels & Resorts, Inc. (NYSE:WH)?
Heading into the fourth quarter of 2019, a total of 36 of the hedge funds tracked by Insider Monkey were long this stock, a change of -10% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards WH over the last 17 quarters. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
The largest stake in Wyndham Hotels & Resorts, Inc. (NYSE:WH) was held by Iridian Asset Management, which reported holding $138.4 million worth of stock at the end of September. It was followed by Millennium Management with a $95.9 million position. Other investors bullish on the company included Tremblant Capital, Carlson Capital, and Permian Investment Partners. In terms of the portfolio weights assigned to each position Permian Investment Partners allocated the biggest weight to Wyndham Hotels & Resorts, Inc. (NYSE:WH), around 14.68% of its portfolio. Marlowe Partners is also relatively very bullish on the stock, dishing out 8.08 percent of its 13F equity portfolio to WH.
Judging by the fact that Wyndham Hotels & Resorts, Inc. (NYSE:WH) has witnessed bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there exists a select few hedgies that elected to cut their full holdings heading into Q4. Intriguingly, Steve Cohen’s Point72 Asset Management dropped the biggest stake of all the hedgies tracked by Insider Monkey, comprising close to $29.7 million in stock, and Andrew Kurita’s Kettle Hill Capital Management was right behind this move, as the fund dropped about $7.9 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 4 funds heading into Q4.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Wyndham Hotels & Resorts, Inc. (NYSE:WH) but similarly valued. These stocks are Hawaiian Electric Industries, Inc. (NYSE:HE), Nutanix, Inc. (NASDAQ:NTNX), Companhia Energetica de Minas Gerais (NYSE:CIG), and Choice Hotels International, Inc. (NYSE:CHH). This group of stocks’ market valuations are similar to WH’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HE | 14 | 189464 | -3 |
| NTNX | 24 | 320502 | -1 |
| CIG | 8 | 54517 | 0 |
| CHH | 20 | 171880 | 1 |
| Average | 16.5 | 184091 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.5 hedge funds with bullish positions and the average amount invested in these stocks was $184 million. That figure was $801 million in WH’s case. Nutanix, Inc. (NASDAQ:NTNX) is the most popular stock in this table. On the other hand Companhia Energetica de Minas Gerais (NYSE:CIG) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Wyndham Hotels & Resorts, Inc. (NYSE:WH) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on WH as the stock returned 12% during the first two months of Q4 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.
Disclosure: None. This article was originally published at Insider Monkey.
