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. We at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded Marriott Vacations Worldwide Corporation (NYSE:VAC) and determine whether the smart money was really smart about this stock.
Marriott Vacations Worldwide Corporation (NYSE:VAC) investors should be aware of a decrease in activity from the world’s largest hedge funds lately. Marriott Vacations Worldwide Corporation (NYSE:VAC) was in 24 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 32. Our calculations also showed that VAC isn’t among the 30 most popular stocks among hedge funds (click for Q2 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.
At the moment there are a large number of metrics stock market investors use to assess their stock investments. A duo of the most useful metrics are hedge fund and insider trading indicators. We have shown that, historically, those who follow the best picks of the elite hedge fund managers can trounce the broader indices by a significant amount (see the details here).
Harold Levy of Iridian Asset Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. With all of this in mind we’re going to take a glance at the recent hedge fund action surrounding Marriott Vacations Worldwide Corporation (NYSE:VAC).
What does smart money think about Marriott Vacations Worldwide Corporation (NYSE:VAC)?
At second quarter’s end, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -4% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards VAC over the last 20 quarters. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
Among these funds, Rima Senvest Management held the most valuable stake in Marriott Vacations Worldwide Corporation (NYSE:VAC), which was worth $113.3 million at the end of the third quarter. On the second spot was Iridian Asset Management which amassed $81.7 million worth of shares. Tremblant Capital, Nantahala Capital Management, and Six Columns Capital 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 Rima Senvest Management allocated the biggest weight to Marriott Vacations Worldwide Corporation (NYSE:VAC), around 7.07% of its 13F portfolio. Six Columns Capital is also relatively very bullish on the stock, setting aside 4.54 percent of its 13F equity portfolio to VAC.
Since Marriott Vacations Worldwide Corporation (NYSE:VAC) has faced bearish sentiment from the smart money, we can see that there exists a select few money managers who sold off their full holdings by the end of the second quarter. Intriguingly, John Khoury’s Long Pond Capital sold off the biggest investment of all the hedgies watched by Insider Monkey, comprising an estimated $31.9 million in stock. Stuart J. Zimmer’s fund, Zimmer Partners, also sold off its stock, about $9 million worth. These moves are important to note, as total hedge fund interest dropped by 1 funds by the end of the second quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Marriott Vacations Worldwide Corporation (NYSE:VAC) but similarly valued. These stocks are South State Corporation (NASDAQ:SSB), Grupo Aeroportuario del Sureste, S. A. B. de C. V. (NYSE:ASR), Freshpet Inc (NASDAQ:FRPT), Spire Inc. (NYSE:SR), Glacier Bancorp, Inc. (NASDAQ:GBCI), Iridium Communications Inc. (NASDAQ:IRDM), and World Wrestling Entertainment, Inc. (NYSE:WWE). All of these stocks’ market caps are closest to VAC’s market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SSB,24,79638,12 ASR,11,69729,7 FRPT,21,128659,-3 SR,18,40448,5 GBCI,20,61522,8 IRDM,19,223663,-1 WWE,29,390419,-2 Average,20.3,142011,3.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.3 hedge funds with bullish positions and the average amount invested in these stocks was $142 million. That figure was $381 million in VAC’s case. World Wrestling Entertainment, Inc. (NYSE:WWE) is the most popular stock in this table. On the other hand Grupo Aeroportuario del Sureste, S. A. B. de C. V. (NYSE:ASR) is the least popular one with only 11 bullish hedge fund positions. Marriott Vacations Worldwide Corporation (NYSE:VAC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VAC is 62.6. 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 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 gained 21.3% in 2020 through September 25th and still beat the market by 17.7 percentage points. Hedge funds were also right about betting on VAC as the stock returned 10.9% during Q3 (through September 25th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.