Is Tripadvisor Inc (NASDAQ:TRIP) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds' picks don't beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Tripadvisor Inc (NASDAQ:TRIP) has experienced an increase in activity from the world's largest hedge funds recently. TRIP was in 29 hedge funds' portfolios at the end of the fourth quarter of 2018. There were 26 hedge funds in our database with TRIP holdings at the end of the previous quarter. Our calculations also showed that TRIP 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 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 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 take a look at the recent hedge fund action regarding Tripadvisor Inc (NASDAQ:TRIP).
How have hedgies been trading Tripadvisor Inc (NASDAQ:TRIP)?
At the end of the fourth quarter, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 12% from the previous quarter. The graph below displays the number of hedge funds with bullish position in TRIP over the last 14 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, Eagle Capital Management held the most valuable stake in Tripadvisor Inc (NASDAQ:TRIP), which was worth $495.9 million at the end of the third quarter. On the second spot was Bares Capital Management which amassed $282.9 million worth of shares. Moreover, D E Shaw, PAR Capital Management, and Renaissance Technologies were also bullish on Tripadvisor Inc (NASDAQ:TRIP), allocating a large percentage of their portfolios to this stock.
As aggregate interest increased, some big names have jumped into Tripadvisor Inc (NASDAQ:TRIP) headfirst. Winton Capital Management, managed by David Harding, assembled the biggest position in Tripadvisor Inc (NASDAQ:TRIP). Winton Capital Management had $10 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital also initiated a $8.8 million position during the quarter. The other funds with brand new TRIP positions are Jeffrey Talpins's Element Capital Management, David Costen Haley's HBK Investments, and Minhua Zhang's Weld Capital Management.
Let's now take a look at hedge fund activity in other stocks similar to Tripadvisor Inc (NASDAQ:TRIP). We will take a look at Credit Acceptance Corp. (NASDAQ:CACC), Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY), Sensata Technologies Holding N.V. (NYSE:ST), and Grupo Televisa SAB (NYSE:TV). This group of stocks' market values resemble TRIP's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CACC,22,990354,2 ALNY,28,628086,-4 ST,23,1307637,-3 TV,14,786715,-5 Average,21.75,928198,-2.5 [/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 $928 million. That figure was $1522 million in TRIP's case. Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) is the most popular stock in this table. On the other hand Grupo Televisa SAB (NYSE:TV) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Tripadvisor Inc (NASDAQ:TRIP) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks among hedge funds returned 21.3% through April 8th and outperformed the S&P 500 ETF (SPY) by more than 5 percentage points. Unfortunately TRIP wasn't in this group. Hedge funds that bet on TRIP were disappointed as the stock lost 3.2% and underperformed the market. If you are interested in investing in large cap stocks, you should check out the top 15 hedge fund stocks as 12 of these outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.