The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 873 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of June 30th, 2021. What do these smart investors think about Willis Towers Watson Public Limited Company (NASDAQ:WLTW)?
Is Willis Towers Watson Public Limited Company (NASDAQ:WLTW) a great investment right now? Prominent investors were becoming hopeful. The number of long hedge fund bets rose by 4 lately. Willis Towers Watson Public Limited Company (NASDAQ:WLTW) was in 70 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 66. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that WLTW isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Seth Klarman of Baupost Group
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind let’s review the fresh hedge fund action regarding Willis Towers Watson Public Limited Company (NASDAQ:WLTW).
Do Hedge Funds Think WLTW Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 70 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from the first quarter of 2020. By comparison, 49 hedge funds held shares or bullish call options in WLTW a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Farallon Capital was the largest shareholder of Willis Towers Watson Public Limited Company (NASDAQ:WLTW), with a stake worth $799.2 million reported as of the end of June. Trailing Farallon Capital was Eagle Capital Management, which amassed a stake valued at $495.3 million. Baupost Group, Cantillon Capital Management, and Adage Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Hunting Hill Global Capital allocated the biggest weight to Willis Towers Watson Public Limited Company (NASDAQ:WLTW), around 19.73% of its 13F portfolio. Highside Global Management is also relatively very bullish on the stock, setting aside 8.3 percent of its 13F equity portfolio to WLTW.
As aggregate interest increased, key hedge funds have jumped into Willis Towers Watson Public Limited Company (NASDAQ:WLTW) headfirst. Falcon Edge Capital, managed by Richard Gerson and Navroz D. Udwadia, initiated the most outsized position in Willis Towers Watson Public Limited Company (NASDAQ:WLTW). Falcon Edge Capital had $76.5 million invested in the company at the end of the quarter. Anand Parekh’s Alyeska Investment Group also made a $74.8 million investment in the stock during the quarter. The following funds were also among the new WLTW investors: Daniel S. Och’s OZ Management, Michael A. Price and Amos Meron’s Empyrean Capital Partners, and Sander Gerber’s Hudson Bay Capital Management.
Let’s check out hedge fund activity in other stocks similar to Willis Towers Watson Public Limited Company (NASDAQ:WLTW). These stocks are Zscaler, Inc. (NASDAQ:ZS), McKesson Corporation (NYSE:MCK), Old Dominion Freight Line (NASDAQ:ODFL), ViacomCBS Inc. (NASDAQ:VIAC), Occidental Petroleum Corporation (NYSE:OXY), Equifax Inc. (NYSE:EFX), and AvalonBay Communities Inc (NYSE:AVB). This group of stocks’ market caps resemble WLTW’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ZS | 38 | 1102517 | 4 |
| MCK | 51 | 2314668 | 0 |
| ODFL | 47 | 673076 | 7 |
| VIAC | 71 | 1872050 | -18 |
| OXY | 57 | 3620384 | 5 |
| EFX | 37 | 3075021 | 0 |
| AVB | 26 | 428148 | -14 |
| Average | 46.7 | 1869409 | -2.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 46.7 hedge funds with bullish positions and the average amount invested in these stocks was $1869 million. That figure was $5594 million in WLTW’s case. ViacomCBS Inc. (NASDAQ:VIAC) is the most popular stock in this table. On the other hand AvalonBay Communities Inc (NYSE:AVB) is the least popular one with only 26 bullish hedge fund positions. Willis Towers Watson Public Limited Company (NASDAQ:WLTW) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for WLTW is 87.9. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24.1% in 2021 through September 20th and beat the market again by 6.9 percentage points. Unfortunately WLTW wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on WLTW were disappointed as the stock returned -1.4% since the end of June (through 9/20) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Willis Towers Watson Plc (NYSE:WTW)
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Disclosure: None. This article was originally published at Insider Monkey.
