Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of December. At Insider Monkey, we follow nearly 750 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Spirit Airlines Incorporated (NYSE:SAVE), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is Spirit Airlines Incorporated (NYSE:SAVE) a buy here? The best stock pickers are buying. The number of bullish hedge fund positions inched up by 10 recently. Our calculations also showed that SAVE isn't among the 30 most popular stocks among hedge funds. SAVE was in 30 hedge funds' portfolios at the end of the fourth quarter of 2018. There were 20 hedge funds in our database with SAVE positions at the end of the previous quarter.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (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 27.5% through March 12, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's take a peek at the key hedge fund action surrounding Spirit Airlines Incorporated (NYSE:SAVE).
How are hedge funds trading Spirit Airlines Incorporated (NYSE:SAVE)?
Heading into the first quarter of 2019, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 50% from the second quarter of 2018. The graph below displays the number of hedge funds with bullish position in SAVE over the last 14 quarters. With hedgies' sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
More specifically, Citadel Investment Group was the largest shareholder of Spirit Airlines Incorporated (NYSE:SAVE), with a stake worth $97.1 million reported as of the end of September. Trailing Citadel Investment Group was Interval Partners, which amassed a stake valued at $58 million. Polar Capital, Ashler Capital, and Columbus Circle Investors were also very fond of the stock, giving the stock large weights in their portfolios.
As aggregate interest increased, key hedge funds have been driving this bullishness. Interval Partners, managed by Gregg Moskowitz, created the biggest position in Spirit Airlines Incorporated (NYSE:SAVE). Interval Partners had $58 million invested in the company at the end of the quarter. Matt Simon (Citadel)'s Ashler Capital also initiated a $38.2 million position during the quarter. The following funds were also among the new SAVE investors: Principal Global Investors's Columbus Circle Investors, Jim Simons's Renaissance Technologies, and Ross Margolies's Stelliam Investment Management.
Let's check out hedge fund activity in other stocks similar to Spirit Airlines Incorporated (NYSE:SAVE). We will take a look at Entegris Inc (NASDAQ:ENTG), Landstar System, Inc. (NASDAQ:LSTR), FibroGen Inc (NASDAQ:FGEN), and Hospitality Properties Trust (NYSE:HPT). All of these stocks' market caps are similar to SAVE's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ENTG,18,423363,-7 LSTR,23,202014,-5 FGEN,20,221726,3 HPT,16,70399,0 Average,19.25,229376,-2.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.25 hedge funds with bullish positions and the average amount invested in these stocks was $229 million. That figure was $518 million in SAVE's case. Landstar System, Inc. (NASDAQ:LSTR) is the most popular stock in this table. On the other hand Hospitality Properties Trust (NYSE:HPT) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Spirit Airlines Incorporated (NYSE:SAVE) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately SAVE wasn't nearly as popular as these 15 stock and hedge funds that were betting on SAVE were disappointed as the stock returned -3.9% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.