Here’s what makes Hyatt (H) hotels a great long-term investment
Baron Funds, an asset management company, has released its Q3 2021 âBaron Real Estate Fundâ letter to investors – a copy of which can be downloaded here. A modest drop of 1.66% was recorded by the fund’s institutional stocks for the third quarter of 2021, slightly underperforming its main benchmark, the MSCI USA IMI Extended Real Estate Index (the “MSCI Real Estate Index” ) and the MSCI US REIT (the âREIT Indexâ), which increased 0.10% and 0.75%, respectively. You can check out the top 5 holdings in the fund to get a feel for their top picks for 2021.
Baron Fund, in its letter to investors for the third quarter of 2021, mentioned Hyatt Hotels Corporation (NYSE: H) and discussed his position on the company. Hyatt Hotels Corporation is a Chicago, Illinois-based hotel company with a market capitalization of $ 9.1 billion. Hyatt has returned 12.42% year-to-date, while its 12-month returns are up 43.10%. The stock closed at $ 83.47 per share on November 2, 2021.
Here’s what Baron Funds has to say about Hyatt Hotels Corporation in his letter to investors Q3 2021:
“Hyatt Hotels Corp.: Following its recent announcement to acquire Apple Leisure Group, a popular independent hotel management company with 102 resorts in 10 countries, we bought back shares in Hyatt, a leading hotel company. We believe this acquisition will accelerate Hyatt’s growth at the forefront of the industry by adding a portfolio of resort brands with a broad pipeline. Hyatt management has also announced plans to accelerate its transformation to higher fee-based revenues and create additional cash flow by seeking to sell $ 2 billion of owned hotels over the next three years. We believe the combination of industry-leading growth, sales of hotel assets at attractive valuations and the continued transformation of the company into a leaner business will lead to improved valuation at Hyatt and strong returns. for shareholders. “
Based on our calculations, Hyatt Hotels Corporation (NYSE: H) was unable to secure a spot on our list of the 30 most popular stocks among hedge funds. Hyatt was listed in 23 hedge fund portfolios at the end of the first half of 2021. Hyatt Hotels Corporation (NYSE: H) has generated a return of 10.12% in the past 3 months.
The reputation of hedge funds as savvy investors has been tarnished over the past decade, as their hedged returns could not keep up with the unhedged returns of stock indices. Our research has shown that small cap hedge fund stock selection managed to beat the market by double digits every year between 1999 and 2016, but the margin for outperformance has shrunk in recent years. Nonetheless, we were still able to identify in advance a select group of hedge funds that have outperformed S&P 500 ETFs by 115 percentage points since March 2017 (see details here). We were also able to identify in advance a select group of hedge funds that underperformed the market by 10 percentage points per year between 2006 and 2017. Interestingly, the margin of underperformance of these stocks has increased in recent years. Investors who are long in the market and short on these stocks would have reported more than 27% per year between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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Disclosure: none. This article originally appeared on Insider Monkey.