A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended March 31st, so let’s proceed with the discussion of the hedge fund sentiment on Twilio Inc. (NYSE:TWLO).
Twilio Inc. (NYSE:TWLO) investors should pay attention to an increase in hedge fund interest lately. Twilio Inc. (NYSE:TWLO) was in 99 hedge funds’ portfolios at the end of March. The all time high for this statistic was previously 94. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that TWLO ranked 20th among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
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. Now let’s check out the new hedge fund action regarding Twilio Inc. (NYSE:TWLO).
Do Hedge Funds Think TWLO Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 99 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 5% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards TWLO over the last 23 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
The largest stake in Twilio Inc. (NYSE:TWLO) was held by SCGE Management, which reported holding $948.4 million worth of stock at the end of December. It was followed by ARK Investment Management with a $932.7 million position. Other investors bullish on the company included Alkeon Capital Management, D E Shaw, and Foxhaven Asset Management. In terms of the portfolio weights assigned to each position SCGE Management allocated the biggest weight to Twilio Inc. (NYSE:TWLO), around 10.64% of its 13F portfolio. Whetstone Capital Advisors is also relatively very bullish on the stock, dishing out 10.02 percent of its 13F equity portfolio to TWLO.
With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Matrix Capital Management, managed by David Goel and Paul Ferri, created the largest position in Twilio Inc. (NYSE:TWLO). Matrix Capital Management had $170.4 million invested in the company at the end of the quarter. Philippe Laffont’s Coatue Management also initiated a $138.5 million position during the quarter. The other funds with new positions in the stock are David Fiszel’s Honeycomb Asset Management, Seth Wunder’s Black-and-White Capital, and Gabriel Plotkin’s Melvin Capital Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Twilio Inc. (NYSE:TWLO) but similarly valued. These stocks are Takeda Pharmaceutical Company Limited (NYSE:TAK), Bank of Montreal (NYSE:BMO), Analog Devices, Inc. (NASDAQ:ADI), Illumina, Inc. (NASDAQ:ILMN), The Progressive Corporation (NYSE:PGR), Moody’s Corporation (NYSE:MCO), and Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX). This group of stocks’ market values are closest to TWLO’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TAK | 19 | 860444 | 1 |
| BMO | 15 | 204401 | 4 |
| ADI | 50 | 4860676 | -8 |
| ILMN | 52 | 1595824 | 7 |
| PGR | 45 | 1211037 | -3 |
| MCO | 55 | 13726876 | -4 |
| VRTX | 68 | 3711731 | 15 |
| Average | 43.4 | 3738713 | 1.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 43.4 hedge funds with bullish positions and the average amount invested in these stocks was $3739 million. That figure was $5812 million in TWLO’s case. Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is the most popular stock in this table. On the other hand Bank of Montreal (NYSE:BMO) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Twilio Inc. (NYSE:TWLO) is more popular among hedge funds. Our overall hedge fund sentiment score for TWLO is 90.5. 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 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 25.8% in 2021 through August 6th and still beat the market by 6.7 percentage points. Unfortunately TWLO wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on TWLO were disappointed as the stock returned 9.1% since the end of the first quarter (through 8/6) 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 most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
