Vail Resorts, Inc. (MTN): Hedge Funds Are Bullish and Insiders Are Undecided, What Should You Do?

What's a smart Vail Resorts, Inc. (NYSE:MTN) investor to do?

In the eyes of many traders, hedge funds are perceived as overrated, outdated investment tools of a forgotten age. Although there are more than 8,000 hedge funds with their doors open today, Insider Monkey focuses on the moguls of this group, about 525 funds. It is widely held that this group controls the lion's share of the smart money's total capital, and by watching their best stock picks, we've come up with a number of investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we've began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).

Equally as useful, positive insider trading sentiment is a second way to analyze the financial markets. Just as you'd expect, there are plenty of stimuli for a corporate insider to get rid of shares of his or her company, but just one, very simple reason why they would buy. Several academic studies have demonstrated the useful potential of this tactic if piggybackers know where to look (learn more here).

Now that that's out of the way, we're going to discuss the newest info for Vail Resorts, Inc. (NYSE:MTN).

How are hedge funds trading Vail Resorts, Inc. (NYSE:MTN)?

At Q2's end, a total of 15 of the hedge funds we track were bullish in this stock, a change of 7% from the previous quarter. With hedge funds' positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were boosting their holdings substantially.

Bearish options on Vail Resorts pay off for some traders as shares slideOut of the hedge funds we follow, Southeastern Asset Management, managed by Mason Hawkins, holds the largest position in Vail Resorts, Inc. (NYSE:MTN). Southeastern Asset Management has a $209.6 million position in the stock, comprising 1% of its 13F portfolio. The second largest stake is held by Fir Tree, managed by Jeffrey Tannenbaum, which held a $48 million position; 0.7% of its 13F portfolio is allocated to the stock. Other hedge funds that hold long positions include Martin Whitman's Third Avenue Management, John Wu's Sureview Capital and Andrew Sandler's Sandler Capital Management.

As one would understandably expect, particular hedge funds have been driving this bullishness. Southeastern Asset Management, managed by Mason Hawkins, assembled the biggest position in Vail Resorts, Inc. (NYSE:MTN). Southeastern Asset Management had 209.6 million invested in the company at the end of the quarter. Jeffrey Tannenbaum's Fir Tree also made a $48 million investment in the stock during the quarter. The following funds were also among the new MTN investors: Martin Whitman's Third Avenue Management, John Wu's Sureview Capital, and Andrew Sandler's Sandler Capital Management.

What do corporate executives and insiders think about Vail Resorts, Inc. (NYSE:MTN)?

Insider buying is most useful when the company in question has seen transactions within the past six months. Over the last 180-day time period, Vail Resorts, Inc. (NYSE:MTN) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We'll also take a look at the relationship between both of these indicators in other stocks similar to Vail Resorts, Inc. (NYSE:MTN). These stocks are Pinnacle Entertainment, Inc (NYSE:PNK), Ameristar Casinos, Inc. (NASDAQ:ASCA), Penn National Gaming, Inc (NASDAQ:PENN), Marriott Vacations Worldwide Corp (NYSE:VAC), and Caesars Entertainment Corp (NASDAQ:CZR). This group of stocks are the members of the resorts & casinos industry and their market caps resemble MTN's market cap.

Company Name
# of Hedge Funds
# of Insiders Buying
# of Insiders Selling

Pinnacle Entertainment, Inc (NYSE:PNK)

Ameristar Casinos, Inc. (NASDAQ:ASCA)

Penn National Gaming, Inc (NASDAQ:PENN)

Marriott Vacations Worldwide Corp (NYSE:VAC)

Caesars Entertainment Corp (NASDAQ:CZR)

Using the returns demonstrated by the previously mentioned strategies, regular investors should always watch hedge fund and insider trading sentiment, and Vail Resorts, Inc. (NYSE:MTN) is no exception.

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