Hedge Funds Are Dumping Tradeweb Markets Inc. (TW)

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 have processed the filings of the more than 866 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31st holdings, data that is available nowhere else. Should you consider Tradeweb Markets Inc. (NASDAQ:TW) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Is Tradeweb Markets Inc. (NASDAQ:TW) a healthy stock for your portfolio? Hedge funds were reducing their bets on the stock. The number of long hedge fund bets were cut by 5 in recent months. Tradeweb Markets Inc. (NASDAQ:TW) was in 26 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 38. Our calculations also showed that TW isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 31 hedge funds in our database with TW holdings at the end of December.

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Steven Cohen of Point72 Asset Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery 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. Keeping this in mind let’s take a peek at the key 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 March, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -16% from the previous quarter. On the other hand, there were a total of 30 hedge funds with a bullish position in TW a year ago. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

The largest stake in Tradeweb Markets Inc. (NASDAQ:TW) was held by Junto Capital Management, which reported holding $83.6 million worth of stock at the end of December. It was followed by Millennium Management with a $35.2 million position. Other investors bullish on the company included Harbor Spring Capital, Citadel Investment Group, and Islet Management. In terms of the portfolio weights assigned to each position Harbor Spring Capital allocated the biggest weight to Tradeweb Markets Inc. (NASDAQ:TW), around 4.82% of its 13F portfolio. Junto Capital Management is also relatively very bullish on the stock, dishing out 3.01 percent of its 13F equity portfolio to TW.

Because Tradeweb Markets Inc. (NASDAQ:TW) has experienced falling interest from the entirety of the hedge funds we track, we can see that there was a specific group of hedge funds that elected to cut their positions entirely heading into Q2. Intriguingly, Panayotis Takis Sparaggis’s Alkeon Capital Management dumped the largest investment of the 750 funds monitored by Insider Monkey, valued at an estimated $97.6 million in stock. Principal Global Investors’s fund, Columbus Circle Investors, also said goodbye to its stock, about $10.4 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 5 funds heading into Q2.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Tradeweb Markets Inc. (NASDAQ:TW) but similarly valued. We will take a look at Qualtrics International Inc. (NASDAQ:XM), Jacobs Engineering Group Inc. (NYSE:J), Avantor, Inc. (NYSE:AVTR), QuantumScape Corporation (NYSE:QS), Sun Communities Inc (NYSE:SUI), Genuine Parts Company (NYSE:GPC), and The Liberty SiriusXM Group (NASDAQ:LSXMA). This group of stocks’ market caps resemble TW’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
XM 37 1247053 37
J 24 995619 -6
AVTR 48 2064929 -8
QS 29 534668 -6
SUI 35 1007911 8
GPC 26 357245 1
LSXMA 38 1727128 -4
Average 33.9 1133508 3.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 33.9 hedge funds with bullish positions and the average amount invested in these stocks was $1134 million. That figure was $312 million in TW’s case. Avantor, Inc. (NYSE:AVTR) is the most popular stock in this table. On the other hand Jacobs Engineering Group Inc. (NYSE:J) is the least popular one with only 24 bullish hedge fund positions. Tradeweb Markets Inc. (NASDAQ:TW) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for TW is 24.7. 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 24% in 2021 through July 9th and beat the market by 6.7 percentage points. A small number of hedge funds were also right about betting on TW, though not to the same extent, as the stock returned 17.8% since the end of Q1 (through July 9th) and outperformed the market.

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Disclosure: None. This article was originally published at Insider Monkey.