Lone Pine Hikes Stake In Top Hotelier Wyndham

Updated on

A filing in Form 13G by Stephen Mandel’s Lone Pine Capital revealed it had boosted its holding in Wyndham Worldwide Corporation (NYSE:WYN) to 5.2%.

Mandel is a ‘Tiger Cub’ who left Robertson in 1997 to float Lone Pine Capital. He is said to have $17B in AUM and is renowned for his stock-picking abilities.

Wyndham is one of the world’s largest hospitality companies. Its brands include the Wyndham Hotel Group, Wyndham Exchange & Rentals and Wyndham Vacation Ownership – all market leaders in their businesses.

Wyndham’s solid Q3 results

The stock hit a 52-week high last month, and in November reported Q3 EPS of $1.41 and revenue of $1.43B which beat estimates by $0.05 and $0.02B respectively. “Wyndham Hotel Group continues to expand its international footprint, Wyndham Exchange & Rentals is benefiting from recent innovations, and Wyndham Vacation Ownership continues to transform the business to an asset-light model.  Overall, we have great momentum across the company, which when combined with our disciplined capital allocation strategy, will continue to create value for shareholders,” said Stephen P Holmes, Chairman and CEO in the earnings release. It paid a quarterly dividend of $0.29.

Analysts bullish on the stock

Analysts at Zacks upgraded the stock earlier this month from Neutral to Outperform following the robust Q3 results.

“Amid a challenging economic environment, Wyndham has succeeded in posting solid top-line growth and higher earnings for the past three quarters, driven by strong performance across all the three operating segments,” said Zacks. “We believe the company’s back-to-back acquisitions, substantial development pipeline and significant international exposure will boost growth, going ahead,” they added.

Analysts at FBR Capital Markets raised their Price target on the stock to $84.00 last week and maintain an Outperform rating on it. Analysts at MKM Partners and Stifel Nicolaus maintain Buy ratings on the stock.

Features on Goldman’s lists

The stock has been regularly featured on Goldman Sachs Group Inc (NYSE:GS)’s list of the 20 most concentrated hedge fund holdings. Last August, the stock was rated one of the 40 cheapest stocks on the market, again, according to Goldman Sachs.

According to TheStreet, the stock also ranks as the #32 broker analyst pick among those stocks screened by The Online Investor for strong stock buyback activity.

The company is scheduled to report Q4 results on February &, 2014. Analysts forecast EPS of $0.73 and revenue of $1.18B.

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