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. We at Insider Monkey have gone over 730 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 28th. In this article we look at what those investors think of Willis Towers Watson Public Limited Company (NASDAQ:WLTW).
Willis Towers Watson Public Limited Company (NASDAQ:WLTW) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 33 hedge funds’ portfolios at the end of the second quarter of 2019. At the end of this article we will also compare WLTW to other stocks including Royal Caribbean Cruises Ltd. (NYSE:RCL), Cintas Corporation (NASDAQ:CTAS), and Digital Realty Trust, Inc. (NYSE:DLR) to get a better sense of its popularity. Our calculations also showed that DTE isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
According to most traders, hedge funds are perceived as underperforming, old investment vehicles of yesteryear. While there are more than 8000 funds with their doors open today, We hone in on the upper echelon of this group, around 750 funds. Most estimates calculate that this group of people control most of all hedge funds’ total asset base, and by monitoring their matchless stock picks, Insider Monkey has spotted a few investment strategies that have historically outperformed the market. Insider Monkey’s flagship hedge fund strategy outstripped the S&P 500 index by around 5 percentage points per year since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to review the latest hedge fund action regarding Willis Towers Watson Public Limited Company (NASDAQ:WLTW).
How are hedge funds trading Willis Towers Watson Public Limited Company (NASDAQ:WLTW)?
Heading into the third quarter of 2019, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. By comparison, 26 hedge funds held shares or bullish call options in WLTW a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
More specifically, Cantillon Capital Management was the largest shareholder of Willis Towers Watson Public Limited Company (NASDAQ:WLTW), with a stake worth $462.6 million reported as of the end of March. Trailing Cantillon Capital Management was Abrams Capital Management, which amassed a stake valued at $212.6 million. Southpoint Capital Advisors, Permian Investment Partners, and Diamond Hill Capital were also very fond of the stock, giving the stock large weights in their portfolios.
Since Willis Towers Watson Public Limited Company (NASDAQ:WLTW) has witnessed a decline in interest from the smart money, it’s safe to say that there was a specific group of hedge funds who were dropping their entire stakes heading into Q3. Intriguingly, Benjamin A. Smith’s Laurion Capital Management said goodbye to the largest stake of the 750 funds tracked by Insider Monkey, worth an estimated $1.8 million in stock, and Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital was right behind this move, as the fund dropped about $1.5 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Willis Towers Watson Public Limited Company (NASDAQ:WLTW) but similarly valued. We will take a look at Royal Caribbean Cruises Ltd. (NYSE:RCL), Cintas Corporation (NASDAQ:CTAS), Digital Realty Trust, Inc. (NYSE:DLR), and Tencent Music Entertainment Group (NYSE:TME). This group of stocks’ market values are closest to WLTW’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RCL | 46 | 1329751 | -1 |
| CTAS | 27 | 552648 | 0 |
| DLR | 18 | 264025 | 2 |
| TME | 11 | 160527 | -9 |
| Average | 25.5 | 576738 | -2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.5 hedge funds with bullish positions and the average amount invested in these stocks was $577 million. That figure was $1694 million in WLTW’s case. Royal Caribbean Cruises Ltd. (NYSE:RCL) is the most popular stock in this table. On the other hand Tencent Music Entertainment Group (NYSE:TME) is the least popular one with only 11 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. 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 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately WLTW wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on WLTW were disappointed as the stock returned 1.1% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.
