Wyndham Worldwide Corporation (WYN): Are Hedge Funds Right About This Stock?

Is Wyndham Worldwide Corporation (NYSE:WYN) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before doing days of research on it. Given their 2 and 20 payment structure, hedge funds have more resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

Wyndham Worldwide Corporation (NYSE:WYN) shareholders have witnessed an increase in support from the world’s most elite money managers lately. WYN was in 29 hedge funds’ portfolios at the end of the third quarter of 2015. There were 28 hedge funds in our database with WYN holdings at the end of the previous quarter. At the end of this article we will also compare WYN to other stocks including PVH Corp (NYSE:PVH), L-3 Communications Holdings, Inc. (NYSE:LLL), and Total System Services, Inc. (NYSE:TSS) to get a better sense of its popularity.

At the moment there are many methods stock market investors have at their disposal to evaluate their stock investments. A pair of the most useful methods are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the best hedge fund managers can outpace the S&P 500 by a significant margin (see the details here).

Keeping this in mind, let’s view the key action regarding Wyndham Worldwide Corporation (NYSE:WYN).

Hedge fund activity in Wyndham Worldwide Corporation (NYSE:WYN)

At the end of the third quarter, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a change of 4% from the previous quarter. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, David Cohen and Harold Levy’s Iridian Asset Management has the largest position in Wyndham Worldwide Corporation (NYSE:WYN), worth close to $400.3 million, comprising 3.4% of its total 13F portfolio. On Iridian Asset Management’s heels is D E Shaw, holding a $105.2 million position; 0.2% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors with similar optimism include Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital, Cliff Asness’ AQR Capital Management and Joel Greenblatt’s Gotham Asset Management.

As industrywide interest jumped, specific money managers were breaking ground themselves. Manikay Partners, managed by Shane Finemore, created the biggest position in Wyndham Worldwide Corporation (NYSE:WYN). Manikay Partners had $12.9 million invested in the company at the end of the quarter. Ken Heebner’s Capital Growth Management also made a $9.3 million investment in the stock during the quarter. The following funds were also among the new WYN investors: Neil Chriss’ Hutchin Hill Capital, Julian Robertson’s Tiger Management, and Paul Tudor Jones’ Tudor Investment Corp.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Wyndham Worldwide Corporation (NYSE:WYN) but similarly valued. We will take a look at PVH Corp (NYSE:PVH), L-3 Communications Holdings, Inc. (NYSE:LLL), Total System Services, Inc. (NYSE:TSS), and Lear Corporation (NYSE:LEA). This group of stocks’ market values match WYN’s market value.

As you can see these stocks had an average of 29.5 hedge funds with bullish positions and the average amount invested in these stocks was $641 million. That figure was $1046 million in WYN’s case. Lear Corporation (NYSE:LEA) is the most popular stock in this table. On the other hand L-3 Communications Holdings, Inc. (NYSE:LLL) is the least popular one with only 18 bullish hedge fund positions. Wyndham Worldwide Corporation (NYSE:WYN) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard LEA might be a better candidate to consider a long position.