- Oops!Something went wrong.Please try again later.
Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Host Hotels and Resorts Inc (NASDAQ:HST).
Is Host Hotels and Resorts Inc (NASDAQ:HST) going to take off soon? Prominent investors were getting more optimistic. The number of bullish hedge fund bets advanced by 3 recently. Host Hotels and Resorts Inc (NASDAQ:HST) was in 25 hedge funds' portfolios at the end of March. The all time high for this statistic is 30. Our calculations also showed that HST isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 22 hedge funds in our database with HST positions at the end of the fourth quarter.
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 monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Ken Heebner of Capital Growth Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. 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 encompassing Host Hotels and Resorts Inc (NASDAQ:HST).
Do Hedge Funds Think HST Is A Good Stock To Buy Now?
At Q1's end, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of 14% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards HST 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.
The largest stake in Host Hotels and Resorts Inc (NASDAQ:HST) was held by Citadel Investment Group, which reported holding $61.5 million worth of stock at the end of December. It was followed by Zimmer Partners with a $44.2 million position. Other investors bullish on the company included Balyasny Asset Management, Millennium Management, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Hill Winds Capital allocated the biggest weight to Host Hotels and Resorts Inc (NASDAQ:HST), around 1.38% of its 13F portfolio. Capital Growth Management is also relatively very bullish on the stock, designating 0.77 percent of its 13F equity portfolio to HST.
As one would reasonably expect, specific money managers have been driving this bullishness. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the largest position in Host Hotels and Resorts Inc (NASDAQ:HST). Arrowstreet Capital had $15.6 million invested in the company at the end of the quarter. Ken Heebner's Capital Growth Management also initiated a $8.4 million position during the quarter. The following funds were also among the new HST investors: Matthew Crandall Gilman's Hill Winds Capital, Greg Eisner's Engineers Gate Manager, and Donald Sussman's Paloma Partners.
Let's also examine hedge fund activity in other stocks similar to Host Hotels and Resorts Inc (NASDAQ:HST). These stocks are Fidelity National Financial Inc (NYSE:FNF), Tuya Inc. (NYSE:TUYA), Zai Lab Limited (NASDAQ:ZLAB), DaVita Inc (NYSE:DVA), Autohome Inc (NYSE:ATHM), Lennox International Inc. (NYSE:LII), and Vail Resorts, Inc. (NYSE:MTN). This group of stocks' market caps resemble HST's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position FNF,39,1164238,-1 TUYA,15,231919,15 ZLAB,32,666075,2 DVA,34,4398979,2 ATHM,18,588993,2 LII,25,395757,-2 MTN,36,1091529,5 Average,28.4,1219641,3.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.4 hedge funds with bullish positions and the average amount invested in these stocks was $1220 million. That figure was $241 million in HST's case. Fidelity National Financial Inc (NYSE:FNF) is the most popular stock in this table. On the other hand Tuya Inc. (NYSE:TUYA) is the least popular one with only 15 bullish hedge fund positions. Host Hotels and Resorts Inc (NASDAQ:HST) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for HST is 53.8. 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. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. 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 24% in 2021 through July 9th and surpassed the market again by 6.7 percentage points. Unfortunately HST wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); HST investors were disappointed as the stock returned 1.5% since the end of March (through 7/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
Get real-time email alerts: Follow Host Hotels & Resorts Inc. (NYSE:HST)
Disclosure: None. This article was originally published at Insider Monkey.