Abacus FCF Advisors Bets $16 Million on Hilton Even as Hotel Stock Lags Market
Key Points
Florida-based Abacus bought 62,891 shares of Hilton for an estimated $16.3 million in the third quarter.
The transaction value represented 2.2% of the fund’s reportable U.S. equity AUM.
Hilton ranks outside the fund's top five holdings.
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Florida-based Abacus FCF Advisors disclosed a new position in Hilton (NYSE:HLT), acquiring 62,891 shares for an estimated $16.3 million during the third quarter, according to an SEC filing released on Monday.
What Happened
Abacus FCF Advisors initiated a new equity position in Hilton during the third quarter, purchasing 62,891 shares valued at approximately $16.3 million, based on average prices during the period. The move, disclosed in a U.S. Securities and Exchange Commission (SEC) filing released on Monday, increased the fund’s total reportable positions to 60 and brought its 13F AUM to $752.3 million.
What Else to Know
Top holdings after the filing:
- NYSE:ABBV: $29.2 million (3.9% of AUM)
- NYSE:MA: $26.2 million (3.5% of AUM)
- NASDAQ:APP: $26.1 million (3.5% of AUM)
- NASDAQ:BKNG: $22 million (2.9% of AUM)
- NASDAQ:AAPL: $20.8 million (2.8% of AUM)
As of Tuesday, shares of Hilton were priced at $265.79, up 12% over the past year and underperforming the S&P 500 by 3 percentage points during the same period.
Company Overview
| Metric | Value |
|---|---|
| Price (as of Tuesday) | $265.79 |
| Market capitalization | $62.6 billion |
| Revenue (TTM) | $11.5 billion |
| Net income (TTM) | $1.6 billion |
Company Snapshot
- Hilton generates revenue primarily from hotel management, franchising, and ownership, with a portfolio of brands spanning luxury to midscale and extended-stay segments.
- The company operates a fee-based business model, earning income through management and franchise agreements, as well as direct hotel ownership in select markets.
- Hilton serves a global customer base of business and leisure travelers, corporations, and group event organizers across 122 countries and territories.
Hilton is a leading global hospitality company with 25 brands, 9,000 properties, and more than 1.3 million rooms under management.
Foolish Take
Abacus FCF Advisors’ new $16.3 million position in Hilton seems in line with its investment thesis, which favors companies with strong free cash flow and shareholder return programs. The move follows similar third-quarter activity that saw new positions in consumer and industrial names alongside exits from higher-growth holdings like DoorDash.
Hilton’s last quarterly report underscored that cash generation story. The company posted a record 510,600 rooms in its development pipeline, up 4% year over year, while returning capital aggressively through $529 million in share repurchases and a stable dividend. Revenue per available room—a key metric for hotel performance—dipped slightly, down 0.5%, but management said they expect the full-year metric to grow up to 2% on a comparable and currency-neutral basis relative to 2024.
Hilton reports next on November 5, with analysts expecting $2.05 per share in earnings on roughly $3 billion in revenue. For long-term investors, Abacus’s move seems to reflect a vote of confidence in Hilton and its proven ability to compound shareholder value through steady expansion and disciplined capital returns.
Glossary
13F AUM: The total market value of U.S. equity securities reported by an institutional investment manager in SEC Form 13F filings.
Reportable position: An investment holding that must be disclosed in regulatory filings due to its size or type.
Quarterly average price: The average price of a security over a specific calendar quarter, used for valuation or reporting.
Fund’s reportable U.S. equity AUM: The portion of a fund’s total assets under management invested in U.S. stocks that must be disclosed in regulatory filings.
Top holdings: The largest investment positions in a fund’s portfolio, typically ranked by market value.
Fee-based business model: A revenue approach where a company earns income primarily through service fees, not direct product sales.
Franchise agreements: Legal contracts allowing third parties to operate businesses using a company’s brand and systems for a fee.
Management agreements: Contracts where a company operates a property or business on behalf of the owner in exchange for a fee.
TTM: The 12-month period ending with the most recent quarterly report.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie, Apple, Booking Holdings, and Mastercard. The Motley Fool has a disclosure policy.
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