Is Twilio Inc (TWLO) Worthy of Your Portfolio?

Due to the fact that Twilio Inc(NYSE:TWLO) has gone through falling interest from the smart money, it’s easy to see that there lies a certain “tier” of hedge funds who were dropping their positions entirely in the third quarter. It’s worth mentioning that David Gallo’s Valinor Management LLC cut the largest stake of all the investors followed by Insider Monkey, worth an estimated $7.3 million in stock, and Alex Sacerdote’s Whale Rock Capital Management was right behind this move, as the fund sold off about $3.7 million worth of shares.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Twilio Inc(NYSE:TWLO) but similarly valued. These stocks are Empresa Nacional de Electricidad S.A. (NYSE:EOCC), Aqua America Inc (NYSE:WTR), Arris Group, Inc. (NASDAQ:ARRS), and Senior Housing Properties Trust (NYSE:SNH). All of these stocks’ market caps are closest to TWLO’s market cap.

As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $376 million. That figure was $70 million in TWLO’s case. Arris Group, Inc. (NASDAQ:ARRS) is the most popular stock in this table. On the other hand Empresa Nacional de Electricidad S.A. (NYSE:EOCC) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Twilio Inc(NYSE:TWLO) is even less popular than EOCC. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

Disclosure: None