We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn't mean that they don't have occasional colossal losses; they do (like Peltz's recent General Electric losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards The Trade Desk, Inc. (NASDAQ:TTD).
Is The Trade Desk, Inc. (NASDAQ:TTD) an attractive stock to buy now? Money managers are taking a bullish view. The number of bullish hedge fund bets went up by 9 recently. Our calculations also showed that ttd isn't among the 30 most popular stocks among hedge funds. TTD was in 25 hedge funds' portfolios at the end of the first quarter of 2019. There were 16 hedge funds in our database with TTD holdings at the end of the previous quarter.
In the financial world there are dozens of gauges stock traders put to use to size up their holdings. A couple of the best gauges are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the top hedge fund managers can beat the market by a superb amount (see the details here).
We're going to check out the fresh hedge fund action surrounding The Trade Desk, Inc. (NASDAQ:TTD).
How have hedgies been trading The Trade Desk, Inc. (NASDAQ:TTD)?
Heading into the second quarter of 2019, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of 56% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards TTD over the last 15 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, D E Shaw was the largest shareholder of The Trade Desk, Inc. (NASDAQ:TTD), with a stake worth $126.2 million reported as of the end of March. Trailing D E Shaw was Citadel Investment Group, which amassed a stake valued at $99.7 million. Renaissance Technologies, Whale Rock Capital Management, and Arrowstreet Capital were also very fond of the stock, giving the stock large weights in their portfolios.
As one would reasonably expect, specific money managers have been driving this bullishness. Whale Rock Capital Management, managed by Alex Sacerdote, established the most valuable position in The Trade Desk, Inc. (NASDAQ:TTD). Whale Rock Capital Management had $65.2 million invested in the company at the end of the quarter. Josh Resnick's Jericho Capital Asset Management also made a $35.2 million investment in the stock during the quarter. The following funds were also among the new TTD investors: James Crichton's Hitchwood Capital Management, Richard Driehaus's Driehaus Capital, and Alexander Mitchell's Scopus Asset Management.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as The Trade Desk, Inc. (NASDAQ:TTD) but similarly valued. We will take a look at RingCentral Inc (NYSE:RNG), Vail Resorts, Inc. (NYSE:MTN), Westlake Chemical Corporation (NYSE:WLK), and Cognex Corporation (NASDAQ:CGNX). All of these stocks' market caps are similar to TTD's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RNG,43,1207897,-5 MTN,28,379860,2 WLK,26,364816,2 CGNX,13,230572,0 Average,27.5,545786,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.5 hedge funds with bullish positions and the average amount invested in these stocks was $546 million. That figure was $493 million in TTD's case. RingCentral Inc (NYSE:RNG) is the most popular stock in this table. On the other hand Cognex Corporation (NASDAQ:CGNX) is the least popular one with only 13 bullish hedge fund positions. The Trade Desk, Inc. (NASDAQ:TTD) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. A small number of hedge funds were also right about betting on TTD as the stock returned 2% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.