The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Park Hotels & Resorts Inc. (NYSE:PK) based on those filings.
Is Park Hotels & Resorts Inc. (NYSE:PK) a buy, sell, or hold? Money managers are becoming more confident. The number of bullish hedge fund positions rose by 13 in recent months. Our calculations also showed that PK 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). PK was in 26 hedge funds' portfolios at the end of March. There were 13 hedge funds in our database with PK positions at the end of the previous quarter. Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_340075" align="aligncenter" width="396"] Mason Hawkins of Southeastern Asset Management[/caption]
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. 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 let's check out the recent hedge fund action encompassing Park Hotels & Resorts Inc. (NYSE:PK).
Hedge fund activity in Park Hotels & Resorts Inc. (NYSE:PK)
At Q1's end, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of 100% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards PK over the last 18 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, Southeastern Asset Management held the most valuable stake in Park Hotels & Resorts Inc. (NYSE:PK), which was worth $90.2 million at the end of the third quarter. On the second spot was King Street Capital which amassed $19.8 million worth of shares. Balyasny Asset Management, Arrowstreet Capital, and Renaissance Technologies 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 1060 Capital Management allocated the biggest weight to Park Hotels & Resorts Inc. (NYSE:PK), around 2.78% of its 13F portfolio. King Street Capital is also relatively very bullish on the stock, designating 2.21 percent of its 13F equity portfolio to PK.
With a general bullishness amongst the heavyweights, key money managers have jumped into Park Hotels & Resorts Inc. (NYSE:PK) headfirst. King Street Capital, managed by Brian J. Higgins, established the biggest position in Park Hotels & Resorts Inc. (NYSE:PK). King Street Capital had $19.8 million invested in the company at the end of the quarter. Dmitry Balyasny's Balyasny Asset Management also initiated a $13.1 million position during the quarter. The following funds were also among the new PK investors: Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Bill Ackman's Pershing Square, and Ken Griffin's Citadel Investment Group.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Park Hotels & Resorts Inc. (NYSE:PK) but similarly valued. We will take a look at IBERIABANK Corporation (NASDAQ:IBKC), Frontline Ltd (NYSE:FRO), Alarm.com Holdings, Inc. (NASDAQ:ALRM), and Alector, Inc. (NASDAQ:ALEC). This group of stocks' market valuations are closest to PK's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position IBKC,30,129219,-2 FRO,24,116530,7 ALRM,23,153195,-5 ALEC,15,416696,2 Average,23,203910,0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $204 million. That figure was $163 million in PK's case. IBERIABANK Corporation (NASDAQ:IBKC) is the most popular stock in this table. On the other hand Alector, Inc. (NASDAQ:ALEC) is the least popular one with only 15 bullish hedge fund positions. Park Hotels & Resorts Inc. (NYSE:PK) 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 8.3% in 2020 through the end of May but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on PK as the stock returned 24.3% in Q2 (through the end of May) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.