We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the government. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article, we look at what those funds think of USA Technologies, Inc. (NASDAQ:USAT) based on that data.
USA Technologies, Inc. (NASDAQ:USAT) has seen a decrease in support from the world’s most elite money managers recently. USAT was in 5 hedge funds’ portfolios at the end of the third quarter of 2015. There were 6 hedge funds in our database with USAT holdings at the end of the previous quarter. At the end of this article we will also compare USAT to other stocks including Imation Corp. (NYSE:IMN), Eastern Virginia Bankshares, Inc. (NASDAQ:EVBS), and Conatus Pharmaceuticals Inc (NASDAQ:CNAT) to get a better sense of its popularity.
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In the financial world there are a large number of tools stock market investors can use to evaluate their stock investments. Two of the most innovative tools are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the best picks of the elite fund managers can outpace the broader indices by a solid margin (see the details here).
Keeping this in mind, let’s take a gander at the key action regarding USA Technologies, Inc. (NASDAQ:USAT).
How have hedgies been trading USA Technologies, Inc. (NASDAQ:USAT)?
At Q3’s end, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from the second quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Whitebox Advisors, managed by Andy Redleaf, holds the number one position in USA Technologies, Inc. (NASDAQ:USAT). Whitebox Advisors has a $1 million position in the stock, comprising less than 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Keane Capital Management, managed by Peter Keane, which holds a $0.7 million position; 0.9% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that are bullish contain Andy Redleaf’s Whitebox Advisors, Richard Driehaus’s Driehaus Capital and Ken Griffin’s Citadel Investment Group.
Judging by the fact that USA Technologies, Inc. (NASDAQ:USAT) has witnessed declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there is a sect of hedgies that decided to sell off their full holdings in the third quarter. Intriguingly, Jim Simons’s Renaissance Technologies dumped the largest position of all the hedgies followed by Insider Monkey, totaling close to $0.1 million in call options, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund said goodbye to its position too. These transactions are interesting, as aggregate hedge fund interest was cut by 1 funds in the third quarter.
Let’s also examine hedge fund activity in other stocks similar to USA Technologies, Inc. (NASDAQ:USAT). We will take a look at Imation Corp. (NYSE:IMN), Eastern Virginia Bankshares, Inc. (NASDAQ:EVBS), Conatus Pharmaceuticals Inc (NASDAQ:CNAT), and Alliqua Biomedical Inc (NASDAQ:ALQA). All of these stocks’ market caps match USAT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IMN | 9 | 27518 | -1 |
| EVBS | 5 | 8781 | 1 |
| CNAT | 10 | 11657 | 1 |
| ALQA | 9 | 17063 | 0 |
As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $16 million. That figure was $3 million in USAT’s case. Conatus Pharmaceuticals Inc (NASDAQ:CNAT) is the most popular stock in this table. On the other hand Eastern Virginia Bankshares, Inc. (NASDAQ:EVBS) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks USA Technologies, Inc. (NASDAQ:USAT) is even less popular than EVBS. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.