In this article we will check out the progression of hedge fund sentiment towards CURO Group Holdings Corp. (NYSE:CURO) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is CURO Group Holdings Corp. (NYSE:CURO) a buy right now? Investors who are in the know were taking a bullish view. The number of bullish hedge fund positions increased by 2 recently. CURO Group Holdings Corp. (NYSE:CURO) was in 22 hedge funds’ portfolios at the end of March. The all time high for this statistic was previously 20. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CURO isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 20 hedge funds in our database with CURO holdings at the end of December.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Noam Gottesman of GLG Partners
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Do Hedge Funds Think CURO Is A Good Stock To Buy Now?
At first quarter’s end, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from the previous quarter. By comparison, 14 hedge funds held shares or bullish call options in CURO a year ago. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
More specifically, Empyrean Capital Partners was the largest shareholder of CURO Group Holdings Corp. (NYSE:CURO), with a stake worth $32.5 million reported as of the end of March. Trailing Empyrean Capital Partners was OCO Capital Partners, which amassed a stake valued at $16.8 million. Second Curve Capital, Steamboat Capital Partners, and CaaS Capital 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 OCO Capital Partners allocated the biggest weight to CURO Group Holdings Corp. (NYSE:CURO), around 13.51% of its 13F portfolio. Second Curve Capital is also relatively very bullish on the stock, designating 12.98 percent of its 13F equity portfolio to CURO.
As industrywide interest jumped, some big names have jumped into CURO Group Holdings Corp. (NYSE:CURO) headfirst. OCO Capital Partners, managed by Eric Schneider, initiated the most valuable position in CURO Group Holdings Corp. (NYSE:CURO). OCO Capital Partners had $16.8 million invested in the company at the end of the quarter. Parsa Kiai’s Steamboat Capital Partners also initiated a $8.9 million position during the quarter. The other funds with new positions in the stock are Frank Fu’s CaaS Capital, Israel Englander’s Millennium Management, and Noam Gottesman’s GLG Partners.
Let’s also examine hedge fund activity in other stocks similar to CURO Group Holdings Corp. (NYSE:CURO). We will take a look at Mirum Pharmaceuticals, Inc. (NASDAQ:MIRM), Capstead Mortgage Corporation (NYSE:CMO), ORBCOMM Inc (NASDAQ:ORBC), Triterras, Inc. (NASDAQ:TRIT), Silence Therapeutics plc (NASDAQ:SLN), Newtek Business Services Corp (NASDAQ:NEWT), and OneWater Marine Inc. (NASDAQ:ONEW). All of these stocks’ market caps resemble CURO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MIRM | 11 | 208047 | -6 |
| CMO | 8 | 52229 | -6 |
| ORBC | 19 | 85660 | 3 |
| TRIT | 12 | 26322 | 0 |
| SLN | 3 | 31153 | 3 |
| NEWT | 5 | 5227 | -1 |
| ONEW | 14 | 79135 | 2 |
| Average | 10.3 | 69682 | -0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.3 hedge funds with bullish positions and the average amount invested in these stocks was $70 million. That figure was $102 million in CURO’s case. ORBCOMM Inc (NASDAQ:ORBC) is the most popular stock in this table. On the other hand Silence Therapeutics plc (NASDAQ:SLN) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks CURO Group Holdings Corp. (NYSE:CURO) is more popular among hedge funds. Our overall hedge fund sentiment score for CURO is 87. 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 23.8% in 2021 through July 16th and still managed to beat the market by 7.7 percentage points. Hedge funds were also right about betting on CURO, though not to the same extent, as the stock returned 10% since the end of March (through July 16th) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.
