Hedge Funds Are Buying Marriott International Inc (MAR)
Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the first quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Marriott International Inc (NYSE:MAR) based on that data.
Is Marriott International Inc (NYSE:MAR) the right pick for your portfolio? The best stock pickers are in an optimistic mood. The number of long hedge fund positions increased by 10 in recent months. Our calculations also showed that MAR isn't among the 30 most popular stocks among hedge funds (click for Q1 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.
In the eyes of most stock holders, hedge funds are seen as slow, outdated financial tools of yesteryear. While there are more than 8000 funds in operation at present, We hone in on the leaders of this group, about 850 funds. Most estimates calculate that this group of people handle the majority of all hedge funds' total capital, and by tailing their matchless stock picks, Insider Monkey has identified numerous investment strategies that have historically outpaced the market. Insider Monkey's flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
[caption id="attachment_30647" align="aligncenter" width="400"]
Boykin Curry of Eagle Capital[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this successful trader’s “corona catalyst plays“. Also, Europe is set to become the world’s largest cannabis market, so we checked out this European marijuana stock pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we're going to view the latest hedge fund action encompassing Marriott International Inc (NYSE:MAR).
What does smart money think about Marriott International Inc (NYSE:MAR)?
At the end of the first quarter, a total of 47 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 27% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards MAR over the last 18 quarters. With hedge funds' capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
More specifically, Eagle Capital Management was the largest shareholder of Marriott International Inc (NYSE:MAR), with a stake worth $1020.7 million reported as of the end of September. Trailing Eagle Capital Management was Markel Gayner Asset Management, which amassed a stake valued at $119.2 million. Ako Capital, Eminence Capital, and Soroban Capital Partners 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 Kamunting Street Capital allocated the biggest weight to Marriott International Inc (NYSE:MAR), around 7.9% of its 13F portfolio. Eagle Capital Management is also relatively very bullish on the stock, earmarking 4.23 percent of its 13F equity portfolio to MAR.
Consequently, key hedge funds have been driving this bullishness. Ako Capital, managed by Nicolai Tangen, established the largest position in Marriott International Inc (NYSE:MAR). Ako Capital had $109.1 million invested in the company at the end of the quarter. Ricky Sandler's Eminence Capital also made a $82.6 million investment in the stock during the quarter. The other funds with brand new MAR positions are Israel Englander's Millennium Management, Stuart J. Zimmer's Zimmer Partners, and Richard Merage's MIG Capital.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Marriott International Inc (NYSE:MAR) but similarly valued. We will take a look at Mercadolibre Inc (NASDAQ:MELI), Suncor Energy Inc. (NYSE:SU), Republic Services, Inc. (NYSE:RSG), and IHS Markit Ltd. (NASDAQ:INFO). This group of stocks' market caps resemble MAR's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MELI,60,2099088,8 SU,30,766498,-9 RSG,32,709358,6 INFO,44,1159316,15 Average,41.5,1183565,5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 41.5 hedge funds with bullish positions and the average amount invested in these stocks was $1184 million. That figure was $1554 million in MAR's case. Mercadolibre Inc (NASDAQ:MELI) is the most popular stock in this table. On the other hand Suncor Energy Inc. (NYSE:SU) is the least popular one with only 30 bullish hedge fund positions. Marriott International Inc (NYSE:MAR) is not the most popular stock in this group but hedge fund interest is still above average. 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 gained 7.9% in 2020 through May 22nd but still beat the market by 15.6 percentage points. Hedge funds were also right about betting on MAR as the stock returned 21.7% in Q2 (through May 22nd) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
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