The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded Expedia Group Inc (NASDAQ:EXPE) and determine whether the smart money was really smart about this stock.
Is Expedia Group Inc (NASDAQ:EXPE) a good investment right now? The best stock pickers were getting more optimistic. The number of long hedge fund positions moved up by 20 recently. Expedia Group Inc (NASDAQ:EXPE) was in 61 hedge funds' portfolios at the end of the second quarter of 2020. The all time high for this statistics is 73. Our calculations also showed that EXPE isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
Today there are several signals market participants use to evaluate their stock investments. A couple of the most underrated signals are hedge fund and insider trading activity. We have shown that, historically, those who follow the best picks of the elite money managers can outperform the broader indices by a healthy margin (see the details here).
Gabriel Plotkin of Melvin Capital Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. Currently, investors are pessimistic about commercial real estate investments. So, we are checking out this contrarian play to diversify our market exposure. We go through lists like the 10 most profitable companies in America to pick the best large-cap stocks to buy. 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. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. Now let's review the latest hedge fund action encompassing Expedia Group Inc (NASDAQ:EXPE).
Hedge fund activity in Expedia Group Inc (NASDAQ:EXPE)
At the end of the second quarter, a total of 61 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 49% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards EXPE over the last 20 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Melvin Capital Management held the most valuable stake in Expedia Group Inc (NASDAQ:EXPE), which was worth $635.2 million at the end of the third quarter. On the second spot was D1 Capital Partners which amassed $486.6 million worth of shares. Altimeter Capital Management, Citadel Investment Group, and Melvin Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Altimeter Capital Management allocated the biggest weight to Expedia Group Inc (NASDAQ:EXPE), around 9.25% of its 13F portfolio. PAR Capital Management is also relatively very bullish on the stock, setting aside 7.65 percent of its 13F equity portfolio to EXPE.
As one would reasonably expect, some big names have jumped into Expedia Group Inc (NASDAQ:EXPE) headfirst. D1 Capital Partners, managed by Daniel Sundheim, created the largest position in Expedia Group Inc (NASDAQ:EXPE). D1 Capital Partners had $486.6 million invested in the company at the end of the quarter. Karthik Sarma's SRS Investment Management also initiated a $88.5 million position during the quarter. The following funds were also among the new EXPE investors: Alexander Mitchell's Scopus Asset Management, Jeffrey Tannenbaum's Fir Tree, and Stephen Mildenhall's Contrarius Investment Management.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Expedia Group Inc (NASDAQ:EXPE) but similarly valued. These stocks are Brown & Brown, Inc. (NYSE:BRO), Open Text Corporation (NASDAQ:OTEX), Ceridian HCM Holding Inc. (NYSE:CDAY), Shinhan Financial Group Co., Ltd. (NYSE:SHG), Ulta Beauty, Inc. (NASDAQ:ULTA), Kirkland Lake Gold Ltd. (NYSE:KL), and Enel Americas S.A. (NYSE:ENIA). This group of stocks' market values are similar to EXPE's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BRO,24,633665,-2 OTEX,18,319502,0 CDAY,30,2098612,6 SHG,2,5215,-3 ULTA,38,662360,-8 KL,23,603164,-5 ENIA,12,96078,5 Average,21,631228,-1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $631 million. That figure was $3109 million in EXPE's case. Ulta Beauty, Inc. (NASDAQ:ULTA) is the most popular stock in this table. On the other hand Shinhan Financial Group Co., Ltd. (NYSE:SHG) is the least popular one with only 2 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 85.1. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 28.2% in 2020 through August 24th but still managed to beat the market by 20.6 percentage points. Hedge funds were also right about betting on EXPE as the stock returned 16.1% since the end of June 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.
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Disclosure: None. This article was originally published at Insider Monkey.