Amid an overall market correction, many stocks that smart money investors were collectively bullish on tanked during the fourth quarter. Among them, Amazon and Netflix ranked among the top 30 picks and both lost around 20%. Facebook, which was the second most popular stock, lost 14% amid uncertainty regarding the interest rates and tech valuations. Nevertheless, our research shows that most of the stocks that smart money likes historically generate strong risk-adjusted returns. This is why following the smart money sentiment is a useful tool at identifying the next stock to invest in.
Ctrip.com International, Ltd. (NASDAQ:CTRP) has seen a decrease in hedge fund sentiment in recent months. CTRP was in 19 hedge funds' portfolios at the end of the third quarter of 2018. There were 31 hedge funds in our database with CTRP positions at the end of the previous quarter. Our calculations also showed that CTRP isn't among the 30 most popular stocks among hedge funds.
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 has shown that hedge funds' large-cap stock picks indeed failed to the beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (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 24% through December 3, 2018. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's take a peek at the fresh hedge fund action encompassing Ctrip.com International, Ltd. (NASDAQ:CTRP).
How are hedge funds trading Ctrip.com International, Ltd. (NASDAQ:CTRP)?
At Q3's end, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of -39% from the second quarter of 2018. On the other hand, there were a total of 28 hedge funds with a bullish position in CTRP at the beginning of this year. With hedge funds' capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
Among these funds, Fisher Asset Management held the most valuable stake in Ctrip.com International, Ltd. (NASDAQ:CTRP), which was worth $358.8 million at the end of the third quarter. On the second spot was Tybourne Capital Management which amassed $275.1 million worth of shares. Moreover, PAR Capital Management, Silver Lake Partners, and AQR Capital Management were also bullish on Ctrip.com International, Ltd. (NASDAQ:CTRP), allocating a large percentage of their portfolios to this stock.