At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Cardtronics plc (NASDAQ:CATM).
Cardtronics plc (NASDAQ:CATM) investors should pay attention to a decrease in activity from the world’s largest hedge funds of late. CATM was in 17 hedge funds’ portfolios at the end of the first quarter of 2020. There were 22 hedge funds in our database with CATM holdings at the end of the previous quarter. Our calculations also showed that CATM isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most stock holders, hedge funds are seen as slow, outdated investment tools of the past. While there are over 8000 funds in operation at the moment, Our experts look at the masters of this club, approximately 850 funds. These investment experts orchestrate most of the hedge fund industry’s total asset base, and by keeping track of their best investments, Insider Monkey has unsheathed several investment strategies that have historically beaten the broader indices. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
David Harding of Winton Capital Management
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to check out the new hedge fund action surrounding Cardtronics plc (NASDAQ:CATM).
How have hedgies been trading Cardtronics plc (NASDAQ:CATM)?
At Q1’s end, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -23% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CATM over the last 18 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Hudson Executive Capital was the largest shareholder of Cardtronics plc (NASDAQ:CATM), with a stake worth $170 million reported as of the end of September. Trailing Hudson Executive Capital was Renaissance Technologies, which amassed a stake valued at $30 million. D E Shaw, Arrowstreet Capital, and Winton Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Hudson Executive Capital allocated the biggest weight to Cardtronics plc (NASDAQ:CATM), around 21.52% of its 13F portfolio. AlphaOne Capital Partners is also relatively very bullish on the stock, setting aside 0.39 percent of its 13F equity portfolio to CATM.
Since Cardtronics plc (NASDAQ:CATM) has witnessed falling interest from the aggregate hedge fund industry, it’s safe to say that there exists a select few money managers who sold off their entire stakes heading into Q4. Interestingly, Israel Englander’s Millennium Management dumped the largest investment of the “upper crust” of funds followed by Insider Monkey, worth about $7.1 million in stock, and Jonathan Lourie and Stuart Fiertz’s Cheyne Capital was right behind this move, as the fund sold off about $2 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 5 funds heading into Q4.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Cardtronics plc (NASDAQ:CATM) but similarly valued. These stocks are Murphy Oil Corporation (NYSE:MUR), Aimmune Therapeutics Inc (NASDAQ:AIMT), NuStar Energy L.P. (NYSE:NS), and ATN International, Inc. (NASDAQ:ATNI). This group of stocks’ market caps are closest to CATM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MUR | 20 | 46262 | -4 |
| AIMT | 18 | 138411 | 5 |
| NS | 4 | 8087 | -3 |
| ATNI | 8 | 59085 | -1 |
| Average | 12.5 | 62961 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.5 hedge funds with bullish positions and the average amount invested in these stocks was $63 million. That figure was $247 million in CATM’s case. Murphy Oil Corporation (NYSE:MUR) is the most popular stock in this table. On the other hand NuStar Energy L.P. (NYSE:NS) is the least popular one with only 4 bullish hedge fund positions. Cardtronics plc (NASDAQ:CATM) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd but beat the market by 15.9 percentage points. Unfortunately CATM wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on CATM were disappointed as the stock returned 14.9% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.
