Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the second quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Twitter Inc (NYSE:TWTR) based on that data.
Is Twitter Inc (NYSE:TWTR) a healthy stock for your portfolio? The smart money was in a bearish mood. The number of long hedge fund bets went down by 18 lately. Twitter Inc (NYSE:TWTR) was in 89 hedge funds’ portfolios at the end of June. The all time high for this statistic is 107. Our calculations also showed that TWTR ranked 26th among the 30 most popular stocks among hedge funds (click for Q2 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Ken Griffin of Citadel Investment Group
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind let’s go over the fresh hedge fund action surrounding Twitter Inc (NYSE:TWTR).
Do Hedge Funds Think TWTR Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 89 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from one quarter earlier. On the other hand, there were a total of 68 hedge funds with a bullish position in TWTR a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Twitter Inc (NYSE:TWTR) was held by ARK Investment Management, which reported holding $854.4 million worth of stock at the end of June. It was followed by Elliott Investment Management with a $688.1 million position. Other investors bullish on the company included Lone Pine Capital, SRS Investment Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Ivy Lane Capital allocated the biggest weight to Twitter Inc (NYSE:TWTR), around 15.33% of its 13F portfolio. Stone House Capital is also relatively very bullish on the stock, dishing out 11.63 percent of its 13F equity portfolio to TWTR.
Because Twitter Inc (NYSE:TWTR) has witnessed bearish sentiment from hedge fund managers, logic holds that there exists a select few hedge funds who sold off their entire stakes heading into Q3. At the top of the heap, Alex Sacerdote’s Whale Rock Capital Management cut the biggest investment of the “upper crust” of funds followed by Insider Monkey, comprising close to $239.2 million in stock, and David Brown’s Hawk Ridge Management was right behind this move, as the fund cut about $50.9 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 18 funds heading into Q3.
Let’s go over hedge fund activity in other stocks similar to Twitter Inc (NYSE:TWTR). We will take a look at Banco Bradesco SA (NYSE:BBD), DocuSign, Inc. (NASDAQ:DOCU), Freeport-McMoRan Inc. (NYSE:FCX), Ambev SA (NYSE:ABEV), BioNTech SE (NASDAQ:BNTX), Aon plc (NYSE:AON), and IDEXX Laboratories, Inc. (NASDAQ:IDXX). This group of stocks’ market caps are closest to TWTR’s market cap.[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BBD,18,362308,-1 DOCU,58,4610698,-2 FCX,76,3869626,8 ABEV,18,301004,0 BNTX,20,579146,2 AON,68,8129736,-4 IDXX,39,3576489,-10 Average,42.4,3061287,-1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 42.4 hedge funds with bullish positions and the average amount invested in these stocks was $3061 million. That figure was $6031 million in TWTR’s case. Freeport-McMoRan Inc. (NYSE:FCX) is the most popular stock in this table. On the other hand Banco Bradesco SA (NYSE:BBD) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Twitter Inc (NYSE:TWTR) is more popular among hedge funds. Our overall hedge fund sentiment score for TWTR is 62. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24.1% in 2021 through September 20th and still beat the market by 6.9 percentage points. Unfortunately TWTR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on TWTR were disappointed as the stock returned -11.4% since the end of the second quarter (through 9/20) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
Jack Dorsey Post Twitter Is Chasing His Crypto, Fintech Dream
At a packed Miami conference in June, Jack Dorsey, mused in front of thousands of attendees about where his real passion lay: “If I weren’t at Square or Twitter, I’d be working on Bitcoin.”
On Monday, Dorsey made good on one part of that, announcing he would leave Twitter for the second time, handing the CEO position to a 10-year veteran at the firm. The 45-year-old entrepreneur, who is often described as an enigma with varied interests from meditation to yoga to fashion design, plans to pursue his passion which include focusing on running Square and doing more philanthropic work, according to a source familiar with his plan.
Well before the surprise news, Dorsey had laid the groundwork for his next chapter, seeding both companies with cryptocurrency-related projects.
Underlying Dorsey’s broader vision is the principle of “decentralisation,” or the idea that technology and finance should not be concentrated among a handful of gatekeepers, as it is now, but should, instead, be steered by the hands of the many, either people or entities.
The concept has played out at Square, which has built a division devoted to working on projects and awarding grants with the aim of growing Bitcoin’s popularity globally. Bitcoin price in India stood at Rs. 44.52 lakh as of 12:50pm IST on December 1.
Dorsey has been a longtime proponent of Bitcoin, and the appeal is that the cryptocurrency will allow for private and secure transactions with the value of Bitcoin unrelated to any government.
The idea has also underpinned new projects at Twitter, where Dorsey tapped a top lieutenant – and now the company’s new CEO Parag Agrawal – to oversee a team that is attempting to construct a decentralised social media protocol, which will allow different social platforms to connect with one another, similar to the way email providers operate.
The project called Bluesky will aim to allow users control over the types of content they see online, removing the “burden” on companies like Twitter to enforce a global policy to fight abuse or misleading information, Dorsey said in 2019 when he announced Bluesky.
Bitcoin has also figured prominently at both of his companies. Square became one of the first public companies to own Bitcoin assets on its balance sheet, having invested $220 million (roughly Rs. 1,650 crore) in the cryptocurrency.
In August, Square created a new business unit called TBD to focus on Bitcoin. The company is also planning to build a hardware wallet for Bitcoin, a Bitcoin mining system, as well as a decentralised Bitcoin exchange.
Twitter allows users to tip their favourite content creators with Bitcoin and has been testing integrations with non-fungible tokens (NFTs), a type of digital asset that allows people to collect unique digital art.
Analysts see the transition as a positive signal for Square, the fintech platform he co-founded in 2009. Square’s core Cash App, after a bull run in its share in 2020, has experienced slower growth in the most recent quarter. It is also trying to digest the $29 billion (roughly Rs. 2,17,240 crore) acquisition of Buy Now Pay Later provider Afterpay, its largest acquisition ever.
But these ambitions will not pay off until years from now, analysts cautioned.
“The blockchain platform they’re trying to develop is great but also fraught with technical challenges and difficult to scale for consumers. I think he’ll focus more on Square and crypto will be part of that,” said Christopher Brendler, an analyst at DA Davidson.
© Thomson Reuters 2021
Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.
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Twitter Bans Sharing Personal Photos, Videos of Other People Without Consent
Twitter launched new rules Tuesday blocking users from sharing private images of other people without their consent, in a tightening of the network’s policy just a day after it changed CEOs.
Beginning today, we will not allow the sharing of private media, such as images or videos of private individuals without their consent. Publishing people’s private info is also prohibited under the policy, as is threatening or incentivizing others to do so.https://t.co/7EXvXdwegG
— Twitter Safety (@TwitterSafety) November 30, 2021
Twitter said this policy does not apply to “public figures or individuals when media and accompanying tweet text are shared in the public interest or add value to public discourse.”
“We will always try to assess the context in which the content is shared and, in such cases, we may allow the images or videos to remain on the service,” the company added.
The right of Internet users to appeal to platforms when images or data about them are posted by third parties, especially for malicious purposes, has been debated for years.
Twitter already prohibited the publication of private information such as a person’s phone number or address, but there are “growing concerns” about the use of content to “harass, intimidate, and reveal the identities of individuals,” Twitter said.
The company noted a “disproportionate effect on women, activists, dissidents, and members of minority communities.”
High-profile examples of online harassment include the barrages of racist, sexist,and homophobic abuse on Twitch, the world’s biggest video game streaming site.
But instances of harassment abound, and victims must often wage lengthy fights to see hurtful, insulting or illegally produced images of themselves removed from the online platforms.
Some Twitter users pushed the company to clarify exactly how the tightened policy would work.
“Does this mean that if I take a picture of, say, a concert in Central Park, I need the permission of everyone in it? We diminish the sense of the public to the detriment of the public,” tweeted Jeff Jarvis, a journalism professor at the City University of New York.
The change came the day after Twitter co-founder Jack Dorsey announced he was leaving the company, and handed CEO duties to company executive Parag Agrawal.
The platform, like other social media networks, has struggled against bullying, misinformation, and hate-fuelled content.
Twitter likely to roll out ‘Reactions’ feature soon
After unveiling several features this year, micro-blogging site Twitter is reportedly readying new features, including Reactions, Downvotes and Sorted Replies for iOS users.
According to reverse engineer Nima Owji, the Reactions feature, which started being tested a couple of months ago, is set to launch soon, reports 9To5Mac.
With four new reactions, “tears of joy,” “thinking face,” “clapping hands” and “crying face,” this feature is designed to give users the ability to better show how conversations make them feel and to give users “a better understanding of how their Tweets are received”.
Citing the reverse engineer, the report also mentioned that the micro-blogging site is now able to store data about the downvotes feature, which is another indicator that this function will be released sooner rather than later.
The report also notes that the company changed the downvote position as well. It has even added a new tab explaining how downvotes work.
This month, the company has rolled out its in-app tipping feature to all Android users above the age of 18, following the iOS launch in September.
Twitter said the “Tips” feature is geared toward users looking to get a little financial support from their followers through Cash App, PayPal, Venmo and Patreon directly through the app.
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