Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Enova International Inc (NYSE:ENVA).
Is Enova International Inc (NYSE:ENVA) a buy, sell, or hold? Prominent investors are getting more optimistic. The number of long hedge fund bets inched up by 3 recently. At the end of this article we will also compare ENVA to other stocks including Hawaiian Telcom HoldCo Inc (NASDAQ:HCOM), HENNESS CAPITAL ACQUISITION CORP II (NASDAQ:HCAC), and MediciNova, Inc. (NASDAQ:MNOV) to get a better sense of its popularity.
Follow Enova International Inc. (NYSE:ENVA)
Follow Enova International Inc. (NYSE:ENVA)
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How have hedgies been trading Enova International Inc (NYSE:ENVA)?
Heading into the fourth quarter of 2016, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 17% from one quarter earlier. Hedge fund ownership of the stock has trended up throughout the last year, rising by over 50% during that time. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Phil Frohlich’s Prescott Group Capital Management has the biggest position in Enova International Inc (NYSE:ENVA), worth close to $18.9 million, comprising 4% of its total 13F portfolio. On Prescott Group Capital Management’s heels is Empyrean Capital Partners, led by Michael A. Price and Amos Meron, holding a $13.5 million position. Remaining professional money managers that hold long positions include Ari Zweiman’s 683 Capital Partners, Chuck Royce’s Royce & Associates and Joe Huber’s Huber Capital Management.
As aggregate interest increased, key hedge funds were leading the bulls’ herd. McKinley Capital Management, managed by Robert B. Gillam, created the most valuable position in Enova International Inc (NYSE:ENVA). McKinley Capital Management had $3.2 million invested in the company at the end of the quarter. Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital also made a $0.2 million investment in the stock during the quarter. The only other fund with a brand new ENVA position is Ken Griffin’s Citadel Investment Group.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Enova International Inc (NYSE:ENVA) but similarly valued. We will take a look at Hawaiian Telcom HoldCo Inc (NASDAQ:HCOM), HENNESS CAPITAL ACQUISITION CORP II (NASDAQ:HCAC), MediciNova, Inc. (NASDAQ:MNOV), and CSS Industries, Inc. (NYSE:CSS). This group of stocks’ market valuations resemble ENVA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HCOM | 7 | 21394 | -2 |
| HCAC | 15 | 45546 | -1 |
| MNOV | 3 | 331 | 0 |
| CSS | 4 | 38011 | -1 |
As you can see these stocks had an average of 7.25 hedge funds with bullish positions and the average amount invested in these stocks was $26 million. That figure was $75 million in ENVA’s case. HENNESS CAPITAL ACQUISITION CORP II (NASDAQ:HCAC) is the most popular stock in this table. On the other hand MediciNova, Inc. (NASDAQ:MNOV) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Enova International Inc (NYSE:ENVA) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None
