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Why COVID-19 Crisis Can’t Sink Tradeweb (TW) Stock?

Artisan Mid Cap Fund recently released its Q1 2020 Investor Letter, a copy of which you can download below. The fund posted a return of -11.55% for the quarter (investor class), outperforming their benchmark, the Russell Midcap Index which returned -27.07% in the same quarter. You should check out Artisan Mid Cap Fund’s top 5 stock picks which helped them beat the market by nearly 16 percentage points. There weren’t a lot of funds who could deliver these kinds of returns without shorting the market or using aggressive put options.

In the said letter, Artisan Mid Cap Fund highlighted a few stocks and Tradeweb Markets Inc. (NASDAQ:TW) is one of them. Tradeweb is an international financial services company. Year-to-date, TW stock gained 29.4% and on May 11th it had a closing price of $59.94. Its market cap is of $13.58 billion. Here is what Artisan Mid Cap Fund said:

“Tradeweb operates one of the largest global over the counter (OTC) electronic trading marketplaces for institutional, wholesale and retail investors and dealers. The company pioneered trading OTC financial products electronically in 1998 and currently operates across four asset classes—rates, credit, money market and equities. These venues provide deeper liquidity, lower trading costs, greater transparency and risk management for both the buy and sell sides. We believe the recent combination of an increase in volatility and displacement of traders due to COVID-19 could accelerate the transition of trading market share to electronic venues.”

In Q4 2019, the number of bullish hedge fund positions on TW stock decreased by about 5% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with TW’s upside potential.

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

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