World-class money managers like Ken Griffin and Barry Rosenstein only invest their wealthy clients’ money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It’s not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It’s also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.
Twilio Inc. (NYSE:TWLO) investors should pay attention to an increase in enthusiasm from smart money lately. TWLO was in 41 hedge funds’ portfolios at the end of September. There were 32 hedge funds in our database with TWLO holdings at the end of the previous quarter. Our calculations also showed that TWLO isn’t among the 30 most popular stocks among hedge funds.
If you’d ask most investors, hedge funds are seen as underperforming, outdated investment tools of the past. While there are over 8000 funds trading at present, Our experts look at the aristocrats of this group, approximately 700 funds. These money managers shepherd the lion’s share of the hedge fund industry’s total asset base, and by observing their finest investments, Insider Monkey has unearthed numerous investment strategies that have historically beaten the S&P 500 index. Insider Monkey’s flagship hedge fund strategy outperformed the S&P 500 index by 6 percentage points a year since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 24% since February 2017 (through December 3rd) even though the market was up nearly 23% during the same period. We just shared a list of 11 short targets in our latest quarterly update.
Let’s take a look at the recent hedge fund action encompassing Twilio Inc. (NYSE:TWLO).
What have hedge funds been doing with Twilio Inc. (NYSE:TWLO)?
Heading into the fourth quarter of 2018, a total of 41 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 28% from the previous quarter. The graph below displays the number of hedge funds with a bullish position in TWLO over the last 13 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Foxhaven Asset Management was the largest shareholder of Twilio Inc. (NYSE:TWLO), with a stake worth $267.9 million reported as of the end of September. Trailing Foxhaven Asset Management was Whale Rock Capital Management, which amassed a stake valued at $182.6 million. Renaissance Technologies, Two Sigma Advisors, and Tiger Global Management LLC were also very fond of the stock, giving the stock large weights in their portfolios.
With a general bullishness amongst the heavyweights, key hedge funds have jumped into Twilio Inc. (NYSE:TWLO) headfirst. Tiger Global Management LLC, managed by Chase Coleman, established the most valuable position in Twilio Inc. (NYSE:TWLO). Tiger Global Management LLC had $88.9 million invested in the company at the end of the quarter. Christopher Lyle’s SCGE Management also initiated an $80.3 million position during the quarter. The other funds with brand new TWLO positions are Michael Pausic’s Foxhaven Asset Management, Steve Cohen’s Point72 Asset Management, and Principal Global Investors’ Columbus Circle Investors.
Let’s now review hedge fund activity in other stocks similar to Twilio Inc. (NYSE:TWLO). These stocks are DENTSPLY SIRONA Inc. (NASDAQ:XRAY), ICON Public Limited Company (NASDAQ:ICLR), L Brands Inc (NYSE:LB), and Brown & Brown, Inc. (NYSE:BRO). This group of stocks’ market caps matches TWLO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| XRAY | 28 | 1252948 | 5 |
| ICLR | 22 | 577377 | 7 |
| LB | 27 | 685137 | 2 |
| BRO | 22 | 715848 | 0 |
| Average | 24.75 | 808 | 3.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.75 hedge funds with bullish positions and the average amount invested in these stocks was $808 million. That figure was $1168 million in TWLO’s case. DENTSPLY SIRONA Inc. (NASDAQ:XRAY) is the most popular stock in this table. On the other hand ICON Public Limited Company (NASDAQ:ICLR) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks Twilio Inc. (NYSE:TWLO) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None. This article was originally published at Insider Monkey.
