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Hedge Funds Have Never Been This Bullish On Twilio Inc. (TWLO), See What Happened

Nina Todic

After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of December 31. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Twilio Inc. (NYSE:TWLO).

Twilio Inc. (NYSE:TWLO) was in 46 hedge funds' portfolios at the end of December. TWLO has experienced an increase in support from the world's most elite money managers of late. There were 41 hedge funds in our database with TWLO holdings at the end of the previous quarter. Our calculations show that the overall hedge fund sentiment towards VAR is currently at its all time high. This is usually a bullish indicator. For example hedge fund sentiment in Xilinx Inc. (XLNX) was also at its all time high at the beginning of this year and the stock returned more than 46% in 2.5 months. We observed a similar performance from Progressive Corporation (PGR) which returned 27% and MSCI which returned 29%. Both stocks outperformed the S&P 500 Index by 14 and 16 percentage points respectively. Hedge fund sentiment towards IQVIA Holdings Inc. (IQV)Brookfield Asset Management Inc. (BAM)Atlassian Corporation Plc (TEAM)RCLMTB, VAR and CRH hit all time highs at the end of December, and all of these stocks returned more than 20% in the first 2.5 months of this year.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

D. E. Shaw

We're going to take a peek at the new hedge fund action surrounding Twilio Inc. (NYSE:TWLO).

What does the smart money think about Twilio Inc. (NYSE:TWLO)?

Heading into the first quarter of 2019, a total of 46 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 12% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in TWLO over the last 14 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

TWLO

Among these funds, Whale Rock Capital Management held the most valuable stake in Twilio Inc. (NYSE:TWLO), which was worth $219.8 million at the end of the third quarter. On the second spot was Foxhaven Asset Management which amassed $198.7 million worth of shares. Moreover, Renaissance Technologies, SCGE Management, and D E Shaw were also bullish on Twilio Inc. (NYSE:TWLO), allocating a large percentage of their portfolios to this stock.

Now, some big names have jumped into Twilio Inc. (NYSE:TWLO) headfirst. Coatue Management, managed by Philippe Laffont, initiated the largest position in Twilio Inc. (NYSE:TWLO). Coatue Management had $86.1 million invested in the company at the end of the quarter. Brandon Haley's Holocene Advisors also initiated a $65.8 million position during the quarter. The other funds with brand new TWLO positions are Glen Kacher's Light Street Capital, Josh Resnick's Jericho Capital Asset Management, and Mark Moore's ThornTree Capital Partners.

Let's go over hedge fund activity in other stocks similar to Twilio Inc. (NYSE:TWLO). We will take a look at Viacom, Inc. (NASDAQ:VIAB), Yandex NV (NASDAQ:YNDX), HollyFrontier Corporation (NYSE:HFC), and Everest Re Group Ltd (NYSE:RE). This group of stocks' market caps resemble TWLO's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VIAB,37,690422,4 YNDX,23,514984,-14 HFC,25,717864,-1 RE,27,446913,13 Average,28,592546,0.5 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 28 hedge funds with bullish positions and the average amount invested in these stocks was $593 million. That figure was $1507 million in TWLO's case. Viacom, Inc. (NASDAQ:VIAB) is the most popular stock in this table. On the other hand Yandex NV (NASDAQ:YNDX) is the least popular one with only 23 bullish hedge fund positions. Compared to these stocks Twilio Inc. (NYSE:TWLO) is more popular among hedge funds. and overall hedge fund sentiment towards the stock is at its all time high. Our calculations showed that top 15 most popular stocks among hedge funds returned 21.3% year-to-date through April 8th and outperformed the S&P 500 ETF (SPY) by more than 5 percentage points. Hedge funds were also right about betting on TWLO as the stock returned 36.8% and outperformed the market as well.

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