Why One Fund Added $4.2 Million to Park Hotels Even Though the Stock Has Slid 27%
Key Points
Pennsylvania-based Matthew 25 Management reported its PK position increased by 373,500 shares in the third quarter.
The position was up $4.22 million in value compared to the previous quarter.
As of September 30, Matthew 25 reported holding 475,000 PK shares valued at $5.26 million.
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Pennsylvania-based Matthew 25 Management disclosed a purchase of 373,500 additional shares of Park Hotels & Resorts (PK) for approximately $4.22 million during the quarter ended September 30, according to a filing published November 12.
What Happened
According to a filing with the U.S. Securities and Exchange Commission dated November 12, Matthew 25 Management Corp increased its holdings in Park Hotels & Resorts (NYSE:PK) by 373,500 shares during the most recent quarter. The total position reached 475,000 shares with a reported market value of $5.26 million at quarter-end.
What Else to Know
Top holdings after the filing:
- NASDAQ: NVDA: $81.72 million (25.2% of AUM)
- NASDAQ: AMZN: $31.56 million (9.7% of AUM)
- NASDAQ: MELI: $30.38 million (9.4% of AUM)
- NYSE: TSM: $19.13 million (5.9% of AUM)
- NASDAQ: TSLA: $16.32 million (5% of AUM)
As of Monday, shares were priced at $10.80, down 27% over the past year and well underperforming the S&P 500, which is up about 16% in the same period.
Company Overview
| Metric | Value |
|---|---|
| Price (as of Monday) | $10.80 |
| Market capitalization | $2.16 billion |
| Revenue (TTM) | $2.54 billion |
| Dividend yield | 9% |
Company Snapshot
- Park Hotels & Resorts operates 40 premium-branded hotels and resorts, generating revenue primarily from lodging, hospitality services, and ancillary real estate activities.
- The business model centers on owning and managing a geographically diverse portfolio of hotel properties, with income streams from room bookings, event hosting, and related services.
- It targets business and leisure travelers in prime city center and resort destinations, focusing on high-traffic, premium locations.
Park Hotels & Resorts Inc. is one of the largest publicly traded lodging REITs in the United States, with a portfolio exceeding 24,000 rooms across major urban and resort markets. Its scale and focus on premium locations provide a competitive edge in the hospitality sector.
Foolish Take
Park Hotels sits at an interesting intersection right now: RevPAR is sliding, margins are compressing, and reported results show a net loss. But the underlying asset base hasn’t disappeared, and the company is leaning hard into liquidity and capital flexibility to ride out the downturn.
In the third quarter, Park reported adjusted EBITDA of $130 million, down from last year, as comparable RevPAR fell 6.1% year over year. Management was blunt about softer leisure and government demand, but also flagged a projected 12% increase in fourth-quarter group revenue pace. That forward visibility matters for a REIT whose cash flow is highly sensitive to occupancy and pricing swings. The company also expanded its revolver to $1 billion and secured up to $800 million in delayed-draw term loans, lifting total liquidity to roughly $2.1 billion.
This also matters with context. This fund’s largest holdings are growth-heavy names like Nvidia, Amazon, MercadoLibre, and Tesla. Park Hotels looks nothing like those positions. Instead, it functions as a cyclical ballast, offering asset-backed optionality and a roughly 9% dividend yield at recent prices. The risk is obvious, but so is the asymmetry if travel stabilizes faster than expected.
Glossary
13F: A quarterly report filed by institutional investment managers disclosing their equity holdings to the SEC.
Assets Under Management (AUM): The total market value of investments managed on behalf of clients by a fund or firm.
Net buy: When the total purchases of a security exceed total sales during a period, increasing the holding.
Dividend yield: Annual dividends paid by a company divided by its share price, expressed as a percentage.
Trailing twelve months (TTM): The 12-month period ending with the most recent quarterly report.
REIT: Real Estate Investment Trust; a company that owns, operates, or finances income-generating real estate.
Market capitalization: The total value of a company's outstanding shares, calculated as share price times shares outstanding.
Premium-branded: Refers to properties or products associated with higher quality, reputation, and pricing within their sector.
Stake: The ownership interest or amount of shares held in a company by an investor or fund.
Filing: An official document submitted to a regulatory body, such as the SEC, containing required financial or operational information.
Quarter-end: The last day of a fiscal quarter, used as a reference point for financial reporting.
Ancillary real estate activities: Additional business operations related to property, such as event hosting or related services, beyond core lodging.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, MercadoLibre, Nvidia, Park Hotels & Resorts, Taiwan Semiconductor Manufacturing, and Tesla. The Motley Fool has a disclosure policy.
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