Is Travel + Leisure Co. (NYSE:TNL) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Travel + Leisure Co. (NYSE:TNL) was in 33 hedge funds’ portfolios at the end of September. The all time high for this statistic is 34. TNL investors should be aware of an increase in support from the world’s most elite money managers lately. There were 30 hedge funds in our database with TNL holdings at the end of June. Our calculations also showed that TNL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Stuart Zimmer of Zimmer Partners
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. With all of this in mind we’re going to take a gander at the latest hedge fund action encompassing Travel + Leisure Co. (NYSE:TNL).
Do Hedge Funds Think TNL Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 33 of the hedge funds tracked by Insider Monkey were long this stock, a change of 10% from the second quarter of 2021. By comparison, 29 hedge funds held shares or bullish call options in TNL a year ago. With the smart money’s capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Richard Mashaal’s Rima Senvest Management has the number one position in Travel + Leisure Co. (NYSE:TNL), worth close to $118.8 million, accounting for 3.4% of its total 13F portfolio. Sitting at the No. 2 spot is David Cohen and Harold Levy of Iridian Asset Management, with a $114 million position; the fund has 3.5% of its 13F portfolio invested in the stock. Other peers with similar optimism include Stuart J. Zimmer’s Zimmer Partners, John Khoury’s Long Pond Capital and Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management. In terms of the portfolio weights assigned to each position MIK Capital allocated the biggest weight to Travel + Leisure Co. (NYSE:TNL), around 6.09% of its 13F portfolio. Solel Partners is also relatively very bullish on the stock, dishing out 4.96 percent of its 13F equity portfolio to TNL.
As aggregate interest increased, some big names were breaking ground themselves. Zimmer Partners, managed by Stuart J. Zimmer, assembled the most outsized position in Travel + Leisure Co. (NYSE:TNL). Zimmer Partners had $105 million invested in the company at the end of the quarter. John Khoury’s Long Pond Capital also made a $80.9 million investment in the stock during the quarter. The following funds were also among the new TNL investors: Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management, Christopher Hillary’s Roubaix Capital, and James Thomas Berylson’s Berylson Capital Partners.
Let’s check out hedge fund activity in other stocks similar to Travel + Leisure Co. (NYSE:TNL). These stocks are Atotech Limited (NYSE:ATC), United Bankshares, Inc. (NASDAQ:UBSI), Adagio Therapeutics Inc. (NASDAQ:ADGI), Balchem Corporation (NASDAQ:BCPC), Sendas Distribuidora S.A. (NYSE:ASAI), 51job, Inc. (NASDAQ:JOBS), and National Storage Affiliates Trust (NYSE:NSA). All of these stocks’ market caps match TNL’s market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ATC,24,268299,1 UBSI,14,31128,5 ADGI,12,612999,12 BCPC,14,52824,-1 ASAI,4,12500,-3 JOBS,19,607968,1 NSA,21,218562,1 Average,15.4,257754,2.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.4 hedge funds with bullish positions and the average amount invested in these stocks was $258 million. That figure was $741 million in TNL’s case. Atotech Limited (NYSE:ATC) is the most popular stock in this table. On the other hand Sendas Distribuidora S.A. (NYSE:ASAI) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Travel + Leisure Co. (NYSE:TNL) is more popular among hedge funds. Our overall hedge fund sentiment score for TNL is 87.1. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately TNL wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on TNL were disappointed as the stock returned -9.7% since the end of the third quarter (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.