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Is Vail Resorts, Inc. (NYSE:MTN) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is Vail Resorts, Inc. (NYSE:MTN) ready to rally soon? The smart money was betting on the stock. The number of bullish hedge fund bets increased by 5 in recent months. Vail Resorts, Inc. (NYSE:MTN) was in 36 hedge funds' portfolios at the end of March. The all time high for this statistic is 39. Our calculations also showed that MTN isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can't expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.
Richard Gerson of Falcon Edge Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best battery 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we're going to go over the fresh hedge fund action surrounding Vail Resorts, Inc. (NYSE:MTN).
Do Hedge Funds Think MTN Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 36 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 16% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards MTN over the last 23 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Select Equity Group held the most valuable stake in Vail Resorts, Inc. (NYSE:MTN), which was worth $389.3 million at the end of the fourth quarter. On the second spot was Ariel Investments which amassed $104.5 million worth of shares. Diamond Hill Capital, D E Shaw, and Jericho Capital Asset 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 Aravt Global allocated the biggest weight to Vail Resorts, Inc. (NYSE:MTN), around 5.25% of its 13F portfolio. MSDC Management is also relatively very bullish on the stock, earmarking 3.75 percent of its 13F equity portfolio to MTN.
Consequently, key hedge funds have jumped into Vail Resorts, Inc. (NYSE:MTN) headfirst. MSDC Management, managed by Marc Lisker, Glenn Fuhrman and John Phelan, created the largest position in Vail Resorts, Inc. (NYSE:MTN). MSDC Management had $53 million invested in the company at the end of the quarter. John Overdeck and David Siegel's Two Sigma Advisors also initiated a $32.1 million position during the quarter. The other funds with new positions in the stock are Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Richard Gerson and Navroz D. Udwadia's Falcon Edge Capital, and James Woodson Davis's Woodson Capital Management.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Vail Resorts, Inc. (NYSE:MTN) but similarly valued. These stocks are China Eastern Airlines Corp. Ltd. (NYSE:CEA), FactSet Research Systems Inc. (NYSE:FDS), Brookfield Renewable Partners L.P. (NYSE:BEP), Vedanta Ltd (NYSE:VEDL), Equity Lifestyle Properties, Inc. (NYSE:ELS), Black Knight, Inc. (NYSE:BKI), and Invesco Ltd. (NYSE:IVZ). This group of stocks' market caps are closest to MTN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CEA,3,2009,2 FDS,30,355190,0 BEP,24,223248,4 VEDL,10,85028,0 ELS,29,620521,5 BKI,40,821783,-4 IVZ,32,1240235,-2 Average,24,478288,0.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $478 million. That figure was $1092 million in MTN's case. Black Knight, Inc. (NYSE:BKI) is the most popular stock in this table. On the other hand China Eastern Airlines Corp. Ltd. (NYSE:CEA) is the least popular one with only 3 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 82.3. 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 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 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. Hedge funds were also right about betting on MTN, though not to the same extent, as the stock returned 10.2% since Q1 (through June 25th) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.