We are still in an overall bull market and many stocks that smart money investors were piling into surged in 2019. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 57% each. Hedge funds’ top 3 stock picks returned 44.6% this year and beat the S&P 500 ETFs by nearly 14 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Euronet Worldwide, Inc. (NASDAQ:EEFT).
Is Euronet Worldwide, Inc. (NASDAQ:EEFT) a buy right now? Investors who are in the know are taking an optimistic view. The number of long hedge fund positions went up by 2 in recent months. Our calculations also showed that EEFT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video at the end of this article for Q2 rankings).
Today there are many methods investors can use to analyze publicly traded companies. A pair of the most under-the-radar methods are hedge fund and insider trading activity. We have shown that, historically, those who follow the best picks of the top hedge fund managers can trounce their index-focused peers by a healthy margin (see the details here).
Louis Navellier of Navellier & Associates
We leave no stone unturned when looking for the next great investment idea. For example one of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock is still extremely cheap despite already gaining 20 percent. Keeping this in mind we’re going to take a gander at the recent hedge fund action surrounding Euronet Worldwide, Inc. (NASDAQ:EEFT).
How have hedgies been trading Euronet Worldwide, Inc. (NASDAQ:EEFT)?
At the end of the third quarter, a total of 35 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from one quarter earlier. On the other hand, there were a total of 24 hedge funds with a bullish position in EEFT a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Euronet Worldwide, Inc. (NASDAQ:EEFT) was held by Arrowstreet Capital, which reported holding $53.8 million worth of stock at the end of September. It was followed by GLG Partners with a $27.9 million position. Other investors bullish on the company included Columbus Circle Investors, Crosslink Capital, and Portolan Capital Management. In terms of the portfolio weights assigned to each position Crosslink Capital allocated the biggest weight to Euronet Worldwide, Inc. (NASDAQ:EEFT), around 6.05% of its 13F portfolio. Lucha Capital Management is also relatively very bullish on the stock, setting aside 3.49 percent of its 13F equity portfolio to EEFT.
As one would reasonably expect, specific money managers have been driving this bullishness. Soros Fund Management, managed by George Soros, established the largest position in Euronet Worldwide, Inc. (NASDAQ:EEFT). Soros Fund Management had $10.5 million invested in the company at the end of the quarter. Mark Coe’s Intrinsic Edge Capital also initiated a $10.2 million position during the quarter. The following funds were also among the new EEFT investors: Sculptor Capital, Renaissance Technologies, and Louis Navellier’s Navellier & Associates.
Let’s check out hedge fund activity in other stocks similar to Euronet Worldwide, Inc. (NASDAQ:EEFT). We will take a look at Invesco Ltd. (NYSE:IVZ), Canopy Growth Corporation (NYSE:CGC), Ares Capital Corporation (NASDAQ:ARCC), and Coty Inc (NYSE:COTY). This group of stocks’ market values are similar to EEFT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IVZ | 24 | 198236 | 4 |
| CGC | 8 | 23222 | 4 |
| ARCC | 21 | 225163 | -2 |
| COTY | 22 | 138577 | 3 |
| Average | 18.75 | 146300 | 2.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.75 hedge funds with bullish positions and the average amount invested in these stocks was $146 million. That figure was $323 million in EEFT’s case. Invesco Ltd. (NYSE:IVZ) is the most popular stock in this table. On the other hand Canopy Growth Corporation (NYSE:CGC) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Euronet Worldwide, Inc. (NASDAQ:EEFT) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.1% in 2019 through December 23rd and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. Hedge funds were also right about betting on EEFT as the stock returned 56.1% so far in 2019 (through 12/23) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
