We at Insider Monkey have gone over 867 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of MarketAxess Holdings Inc. (NASDAQ:MKTX) based on that data.
MarketAxess Holdings Inc. (NASDAQ:MKTX) was in 29 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 34. MKTX has seen a decrease in hedge fund interest lately. There were 31 hedge funds in our database with MKTX positions at the end of the second quarter. Our calculations also showed that MKTX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. With all of this in mind we’re going to analyze the latest hedge fund action encompassing MarketAxess Holdings Inc. (NASDAQ:MKTX).
Nick Thakore of Diametric Capital
Do Hedge Funds Think MKTX Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards MKTX over the last 25 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Guardian Capital’s GuardCap Asset Management has the most valuable position in MarketAxess Holdings Inc. (NASDAQ:MKTX), worth close to $497.8 million, corresponding to 6.9% of its total 13F portfolio. The second most bullish fund manager is Renaissance Technologies, holding a $78 million position; 0.1% of its 13F portfolio is allocated to the stock. Other professional money managers that are bullish include Ken Griffin’s Citadel Investment Group, Wallace Weitz’s Wallace R. Weitz & Co. and Phill Gross and Robert Atchinson’s Adage Capital Management. In terms of the portfolio weights assigned to each position Lakehouse Capital allocated the biggest weight to MarketAxess Holdings Inc. (NASDAQ:MKTX), around 7.1% of its 13F portfolio. GuardCap Asset Management is also relatively very bullish on the stock, designating 6.86 percent of its 13F equity portfolio to MKTX.
Since MarketAxess Holdings Inc. (NASDAQ:MKTX) has experienced falling interest from the aggregate hedge fund industry, it’s easy to see that there was a specific group of hedge funds who sold off their positions entirely by the end of the third quarter. It’s worth mentioning that Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital said goodbye to the biggest stake of all the hedgies followed by Insider Monkey, comprising an estimated $26 million in stock. Joseph Samuels’s fund, Islet Management, also dumped its stock, about $23.2 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 2 funds by the end of the third quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as MarketAxess Holdings Inc. (NASDAQ:MKTX) but similarly valued. These stocks are DLocal Limited (NASDAQ:DLO), Repligen Corporation (NASDAQ:RGEN), Olaplex Holdings Inc. (NASDAQ:OLPX), WPP Plc (NYSE:WPP), James Hardie Industries plc (NYSE:JHX), Molina Healthcare, Inc. (NYSE:MOH), and Quanta Services Inc (NYSE:PWR). All of these stocks’ market caps match MKTX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DLO | 19 | 480501 | -1 |
| RGEN | 35 | 1499835 | 0 |
| OLPX | 52 | 710529 | 52 |
| WPP | 5 | 15930 | -1 |
| JHX | 5 | 13962 | 1 |
| MOH | 28 | 1539147 | -6 |
| PWR | 38 | 1526790 | -2 |
| Average | 26 | 826671 | 6.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $827 million. That figure was $730 million in MKTX’s case. Olaplex Holdings Inc. (NASDAQ:OLPX) is the most popular stock in this table. On the other hand WPP Plc (NYSE:WPP) is the least popular one with only 5 bullish hedge fund positions. MarketAxess Holdings Inc. (NASDAQ:MKTX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MKTX is 54.1. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately MKTX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on MKTX were disappointed as the stock returned -16% since the end of September (through 11/30) 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 Marketaxess Holdings Inc (NASDAQ:MKTX)
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Disclosure: None. This article was originally published at Insider Monkey.
