It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The S&P 500 Index gained 7.6% in the 12 month-period that ended November 21, while less than 49% of its stocks beat the benchmark. In contrast, the 30 most popular mid-cap stocks among the top hedge fund investors tracked by the Insider Monkey team returned 18% over the same period, which provides evidence that these money managers do have great stock picking abilities. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Virtu Financial Inc (NASDAQ:VIRT).
Virtu Financial Inc (NASDAQ:VIRT) has seen an increase in activity from the world’s largest hedge funds in recent months. VIRT was in 14 hedge funds’ portfolios at the end of the third quarter of 2016. There were 13 hedge funds in our database with VIRT holdings at the end of the previous quarter. At the end of this article we will also compare VIRT to other stocks including Louisiana-Pacific Corporation (NYSE:LPX), Virgin America Inc (NASDAQ:VA), and Ligand Pharmaceuticals Inc. (NASDAQ:LGND) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
What does the smart money think about Virtu Financial Inc (NASDAQ:VIRT)?
At the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, an 8% increase from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards VIRT over the last 5 quarters, which has been relatively stable. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Alyeska Investment Group, led by Anand Parekh, holds the largest position in Virtu Financial Inc (NASDAQ:VIRT). Alyeska Investment Group has a $13.1 million position in the stock. Sitting at the No. 2 spot is Millennium Management, founded by Israel Englander, which holds a $12.7 million position. Some other hedge funds and institutional investors with similar optimism comprise Glenn Russell Dubin’s Highbridge Capital Management, Chuck Royce’s Royce & Associates, and Mark Kingdon’s Kingdon Capital. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.