Is Park Hotels & Resorts Inc. (NYSE:PK) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from industry insiders. They sometimes fail miserably but historically their consensus stock picks outperformed the market after adjusting for known risk factors.
Park Hotels & Resorts Inc. (NYSE:PK) was in 15 hedge funds' portfolios at the end of the third quarter of 2018. PK investors should pay attention to an increase in hedge fund interest recently. There were 14 hedge funds in our database with PK positions at the end of the previous quarter. Our calculations also showed that pk isn't among the 30 most popular stocks among hedge funds.
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 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Let's review the latest hedge fund action encompassing Park Hotels & Resorts Inc. (NYSE:PK).
How have hedgies been trading Park Hotels & Resorts Inc. (NYSE:PK)?
At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of 7% from the previous quarter. On the other hand, there were a total of 18 hedge funds with a bullish position in PK at the beginning of this year. With hedge funds' positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).
The largest stake in Park Hotels & Resorts Inc. (NYSE:PK) was held by Southeastern Asset Management, which reported holding $542.6 million worth of stock at the end of September. It was followed by Ancora Advisors with a $29.8 million position. Other investors bullish on the company included Citadel Investment Group, Renaissance Technologies, and Millennium Management.
As aggregate interest increased, some big names were breaking ground themselves. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, created the most outsized position in Park Hotels & Resorts Inc. (NYSE:PK). Marshall Wace LLP had $9.9 million invested in the company at the end of the quarter. Dmitry Balyasny's Balyasny Asset Management also initiated a $1.2 million position during the quarter. The following funds were also among the new PK investors: Ken Griffin's Citadel Investment Group, Richard S. Pzena's Pzena Investment Management, and Gavin Saitowitz and Cisco J. del Valle's Springbok Capital.
Let's also examine hedge fund activity in other stocks similar to Park Hotels & Resorts Inc. (NYSE:PK). These stocks are SAGE Therapeutics Inc (NASDAQ:SAGE), Alkermes Plc (NASDAQ:ALKS), Aqua America Inc (NYSE:WTR), and Jones Lang LaSalle Inc (NYSE:JLL). This group of stocks' market caps match PK's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SAGE,37,602332,-1 ALKS,16,159863,-1 WTR,13,132708,0 JLL,21,858022,3 Average,21.75,438231,0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.75 hedge funds with bullish positions and the average amount invested in these stocks was $438 million. That figure was $692 million in PK's case. SAGE Therapeutics Inc (NASDAQ:SAGE) is the most popular stock in this table. On the other hand Aqua America Inc (NYSE:WTR) is the least popular one with only 13 bullish hedge fund positions. Park Hotels & Resorts Inc. (NYSE:PK) 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 SAGE might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.