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The Insider Monkey team has completed processing the quarterly 13F filings for the December quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Wynn Resorts, Limited (NASDAQ:WYNN).
Is WYNN stock a buy or sell? Wynn Resorts, Limited (NASDAQ:WYNN) was in 52 hedge funds' portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 50. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. WYNN shareholders have witnessed an increase in enthusiasm from smart money in recent months. There were 43 hedge funds in our database with WYNN positions at the end of the third quarter. Our calculations also showed that WYNN isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? 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 S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).
Gil Simon of SoMa Equity Partners
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell 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 (or at the end of this article). With all of this in mind let's take a gander at the latest hedge fund action regarding Wynn Resorts, Limited (NASDAQ:WYNN).
Do Hedge Funds Think WYNN Is A Good Stock To Buy Now?
At fourth quarter's end, a total of 52 of the hedge funds tracked by Insider Monkey were long this stock, a change of 21% from the previous quarter. By comparison, 44 hedge funds held shares or bullish call options in WYNN a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Wynn Resorts, Limited (NASDAQ:WYNN) was held by SoMa Equity Partners, which reported holding $197.5 million worth of stock at the end of December. It was followed by Melvin Capital Management with a $158 million position. Other investors bullish on the company included Iridian Asset Management, Coatue Management, and D E Shaw. In terms of the portfolio weights assigned to each position 1060 Capital Management allocated the biggest weight to Wynn Resorts, Limited (NASDAQ:WYNN), around 11.63% of its 13F portfolio. Rip Road Capital is also relatively very bullish on the stock, designating 7.27 percent of its 13F equity portfolio to WYNN.
There weren't any hedge funds initiating brand new positions in the stock during the fourth quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Wynn Resorts, Limited (NASDAQ:WYNN) but similarly valued. These stocks are Graco Inc. (NYSE:GGG), Qiagen NV (NYSE:QGEN), Atmos Energy Corporation (NYSE:ATO), Booz Allen Hamilton Holding Corporation (NYSE:BAH), PPD, Inc. (NASDAQ:PPD), IPG Photonics Corporation (NASDAQ:IPGP), and Sibanye Stillwater Limited (NYSE:SBSW). This group of stocks' market caps are similar to WYNN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GGG,25,269383,-5 QGEN,24,670099,-5 ATO,25,274618,7 BAH,27,305001,-4 PPD,29,703701,-4 IPGP,25,522346,1 SBSW,17,277735,-5 Average,24.6,431840,-2.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.6 hedge funds with bullish positions and the average amount invested in these stocks was $432 million. That figure was $1104 million in WYNN's case. PPD, Inc. (NASDAQ:PPD) is the most popular stock in this table. On the other hand Sibanye Stillwater Limited (NYSE:SBSW) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks Wynn Resorts, Limited (NASDAQ:WYNN) is more popular among hedge funds. Our overall hedge fund sentiment score for WYNN is 90. 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. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks returned 5.3% in 2021 through March 19th but still managed to beat the market by 0.8 percentage points. Hedge funds were also right about betting on WYNN as the stock returned 20.1% since the end of December (through 3/19) 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.
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Disclosure: None. This article was originally published at Insider Monkey.