In this article we will take a look at whether hedge funds think Tradeweb Markets Inc. (NASDAQ:TW) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is TW stock a buy? Tradeweb Markets Inc. (NASDAQ:TW) has experienced an increase in activity from the world’s largest hedge funds of late. Tradeweb Markets Inc. (NASDAQ:TW) was in 31 hedge funds’ portfolios at the end of December. The all time high for this statistic is 38. There were 24 hedge funds in our database with TW positions at the end of the third quarter. Our calculations also showed that TW isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Donald Sussman of Paloma Partners
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we heard that billionaire Peter Thiel is backing this psychedelic-drug startup. So, we are taking a closer look at this space. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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 website. With all of this in mind we’re going to go over the new hedge fund action regarding Tradeweb Markets Inc. (NASDAQ:TW).
Do Hedge Funds Think TW Is A Good Stock To Buy Now?
At the end of the fourth quarter, a total of 31 of the hedge funds tracked by Insider Monkey were long this stock, a change of 29% from one quarter earlier. By comparison, 36 hedge funds held shares or bullish call options in TW a year ago. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
The largest stake in Tradeweb Markets Inc. (NASDAQ:TW) was held by Alkeon Capital Management, which reported holding $97.6 million worth of stock at the end of December. It was followed by Citadel Investment Group with a $60.8 million position. Other investors bullish on the company included Harbor Spring Capital, Islet Management, and D E Shaw. In terms of the portfolio weights assigned to each position Harbor Spring Capital allocated the biggest weight to Tradeweb Markets Inc. (NASDAQ:TW), around 3.12% of its 13F portfolio. Lunia Capital is also relatively very bullish on the stock, designating 3.04 percent of its 13F equity portfolio to TW.
As aggregate interest increased, some big names have jumped into Tradeweb Markets Inc. (NASDAQ:TW) headfirst. Millennium Management, managed by Israel Englander, assembled the most outsized position in Tradeweb Markets Inc. (NASDAQ:TW). Millennium Management had $12.6 million invested in the company at the end of the quarter. Vikas Lunia’s Lunia Capital also initiated a $7.9 million position during the quarter. The other funds with new positions in the stock are Peter Seuss’s Prana Capital Management, Allon Hellmann’s Full18 Capital, and Donald Sussman’s Paloma Partners.
Let’s check out hedge fund activity in other stocks similar to Tradeweb Markets Inc. (NASDAQ:TW). We will take a look at Jacobs Engineering Group Inc. (NYSE:J), Plug Power, Inc. (NASDAQ:PLUG), Avangrid, Inc. (NYSE:AGR), Cincinnati Financial Corporation (NASDAQ:CINF), Cognex Corporation (NASDAQ:CGNX), Godaddy Inc (NYSE:GDDY), and Imperial Oil Limited (NYSE:IMO). This group of stocks’ market values resemble TW’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| J | 30 | 1038493 | 3 |
| PLUG | 21 | 734364 | 0 |
| AGR | 10 | 64954 | -1 |
| CINF | 20 | 842405 | 1 |
| CGNX | 31 | 382597 | 3 |
| GDDY | 44 | 2610164 | 0 |
| IMO | 8 | 20725 | -3 |
| Average | 23.4 | 813386 | 0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.4 hedge funds with bullish positions and the average amount invested in these stocks was $813 million. That figure was $331 million in TW’s case. Godaddy Inc (NYSE:GDDY) is the most popular stock in this table. On the other hand Imperial Oil Limited (NYSE:IMO) is the least popular one with only 8 bullish hedge fund positions. Tradeweb Markets Inc. (NASDAQ:TW) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TW is 66.4. 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. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.2% in 2021 through April 12th and still beat the market by 1.5 percentage points. Hedge funds were also right about betting on TW as the stock returned 26.7% since the end of Q4 (through 4/12) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
