The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. What do these smart investors think about Wynn Resorts, Limited (NASDAQ:WYNN)?
Wynn Resorts, Limited (NASDAQ:WYNN) investors should be aware of a decrease in hedge fund interest in recent months. Our calculations also showed that WYNN 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). Video: Watch our video about the top 5 most popular hedge fund stocks.
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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 51 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_735641" align="aligncenter" width="390"] Michael Lowenstein of Kensico Capital[/caption]
At Insider Monkey 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 this one. 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. Now we're going to take a gander at the fresh hedge fund action encompassing Wynn Resorts, Limited (NASDAQ:WYNN).
How have hedgies been trading Wynn Resorts, Limited (NASDAQ:WYNN)?
At the end of the first quarter, a total of 40 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -9% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in WYNN over the last 18 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Melvin Capital Management held the most valuable stake in Wynn Resorts, Limited (NASDAQ:WYNN), which was worth $97.7 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $73.7 million worth of shares. Eminence Capital, Point72 Asset Management, and OZ Management 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 Columbus Hill Capital Management allocated the biggest weight to Wynn Resorts, Limited (NASDAQ:WYNN), around 3.75% of its 13F portfolio. Alden Global Capital is also relatively very bullish on the stock, designating 3.71 percent of its 13F equity portfolio to WYNN.
Judging by the fact that Wynn Resorts, Limited (NASDAQ:WYNN) has experienced bearish sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of money managers that slashed their entire stakes heading into Q4. It's worth mentioning that John Armitage's Egerton Capital Limited cut the largest stake of all the hedgies followed by Insider Monkey, valued at close to $138.7 million in stock, and Jack Woodruff's Candlestick Capital Management was right behind this move, as the fund cut about $27.3 million worth. These transactions are important to note, as total hedge fund interest dropped by 4 funds heading into Q4.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Wynn Resorts, Limited (NASDAQ:WYNN) but similarly valued. We will take a look at Advance Auto Parts, Inc. (NYSE:AAP), Aspen Technology, Inc. (NASDAQ:AZPN), Regency Centers Corp (NASDAQ:REG), and AptarGroup, Inc. (NYSE:ATR). All of these stocks' market caps match WYNN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AAP,38,839686,-4 AZPN,20,736673,-17 REG,18,167065,2 ATR,20,156311,-5 Average,24,474934,-6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $475 million. That figure was $403 million in WYNN's case. Advance Auto Parts, Inc. (NYSE:AAP) is the most popular stock in this table. On the other hand Regency Centers Corp (NASDAQ:REG) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Wynn Resorts, Limited (NASDAQ:WYNN) is more popular among hedge funds. 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 returned 8.3% in 2020 through the end of May but still managed to beat the market by 13.2 percentage points. Hedge funds were also right about betting on WYNN as the stock returned 38.4% so far in Q2 (through the end of May) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.