Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 750 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds' 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Ryanair Holdings plc (NASDAQ:RYAAY) in this article.
Is Ryanair Holdings plc (NASDAQ:RYAAY) a buy right now? Prominent investors are in a bullish mood. The number of long hedge fund positions moved up by 9 in recent months. Our calculations also showed that ryaay isn't among the 30 most popular stocks among hedge funds.
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. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
[caption id="attachment_746893" align="aligncenter" width="473"] Paul Marshall of Marshall Wace[/caption]
Let's check out the new hedge fund action regarding Ryanair Holdings plc (NASDAQ:RYAAY).
Hedge fund activity in Ryanair Holdings plc (NASDAQ:RYAAY)
At the end of the first quarter, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 100% from one quarter earlier. On the other hand, there were a total of 12 hedge funds with a bullish position in RYAAY a year ago. With the smart money's sentiment swirling, there exists an "upper tier" of notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Ryanair Holdings plc (NASDAQ:RYAAY), which was worth $257.2 million at the end of the first quarter. On the second spot was Marshall Wace LLP which amassed $41 million worth of shares. Moreover, Woodson Capital Management, Teewinot Capital Advisers, and Everett Capital Advisors were also bullish on Ryanair Holdings plc (NASDAQ:RYAAY), allocating a large percentage of their portfolios to this stock.
Consequently, some big names have been driving this bullishness. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the biggest position in Ryanair Holdings plc (NASDAQ:RYAAY). Marshall Wace LLP had $41 million invested in the company at the end of the quarter. Kelly Hampaul's Everett Capital Advisors also initiated a $15.7 million position during the quarter. The other funds with new positions in the stock are Noam Gottesman's GLG Partners, Paul Singer's Elliott Management, and Andy Redleaf's Whitebox Advisors.
Let's now review hedge fund activity in other stocks similar to Ryanair Holdings plc (NASDAQ:RYAAY). We will take a look at Laboratory Corp. of America Holdings (NYSE:LH), Darden Restaurants, Inc. (NYSE:DRI), Citizens Financial Group Inc (NYSE:CFG), and HCP, Inc. (NYSE:HCP). This group of stocks' market valuations resemble RYAAY's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LH,39,1198920,1 DRI,38,1016976,1 CFG,41,1207295,-2 HCP,26,661094,-2 Average,36,1021071,-0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 36 hedge funds with bullish positions and the average amount invested in these stocks was $1021 million. That figure was $429 million in RYAAY's case. Citizens Financial Group Inc (NYSE:CFG) is the most popular stock in this table. On the other hand HCP, Inc. (NYSE:HCP) is the least popular one with only 26 bullish hedge fund positions. Compared to these stocks Ryanair Holdings plc (NASDAQ:RYAAY) is even less popular than HCP. Hedge funds dodged a bullet by taking a bearish stance towards RYAAY. Our calculations showed that the top 15 most popular hedge fund stocks returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately RYAAY wasn't nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); RYAAY investors were disappointed as the stock returned -11.3% during the same time frame and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in the second quarter.
Disclosure: None. This article was originally published at Insider Monkey.