You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund managers like Jeff Ubben, George Soros and Seth Klarman hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
Hedge fund interest in EVO Payments, Inc. (NASDAQ:EVOP) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Inphi Corporation (NYSE:IPHI), Revolve Group, Inc. (NYSE:RVLV), and Covanta Holding Corporation (NYSE:CVA) to gather more data points. Our calculations also showed that EVOP isn’t among the 30 most popular stocks among hedge funds (view the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
At the moment there are a large number of signals investors have at their disposal to appraise their holdings. A pair of the most under-the-radar signals are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the top investment managers can outpace the market by a superb amount (see the details here).
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s take a glance at the latest hedge fund action regarding EVO Payments, Inc. (NASDAQ:EVOP).
What have hedge funds been doing with EVO Payments, Inc. (NASDAQ:EVOP)?
At the end of the second quarter, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the first quarter of 2019. On the other hand, there were a total of 12 hedge funds with a bullish position in EVOP a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Select Equity Group was the largest shareholder of EVO Payments, Inc. (NASDAQ:EVOP), with a stake worth $14.3 million reported as of the end of March. Trailing Select Equity Group was Greenhouse Funds, which amassed a stake valued at $12 million. D E Shaw, Citadel Investment Group, and Adage Capital Management were also very fond of the stock, giving the stock large weights in their portfolios.
Because EVO Payments, Inc. (NASDAQ:EVOP) has faced falling interest from the entirety of the hedge funds we track, logic holds that there was a specific group of funds that slashed their full holdings by the end of the second quarter. Interestingly, Dmitry Balyasny’s Balyasny Asset Management said goodbye to the largest investment of the 750 funds followed by Insider Monkey, totaling about $1.1 million in stock, and Frank Slattery’s Symmetry Peak Management was right behind this move, as the fund said goodbye to about $0.3 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks similar to EVO Payments, Inc. (NASDAQ:EVOP). We will take a look at Inphi Corporation (NYSE:IPHI), Revolve Group, Inc. (NYSE:RVLV), Covanta Holding Corporation (NYSE:CVA), and Nelnet, Inc. (NYSE:NNI). All of these stocks’ market caps resemble EVOP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IPHI | 26 | 219588 | 5 |
| RVLV | 15 | 52196 | 15 |
| CVA | 15 | 102764 | -3 |
| NNI | 13 | 94103 | -2 |
| Average | 17.25 | 117163 | 3.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.25 hedge funds with bullish positions and the average amount invested in these stocks was $117 million. That figure was $74 million in EVOP’s case. Inphi Corporation (NYSE:IPHI) is the most popular stock in this table. On the other hand Nelnet, Inc. (NYSE:NNI) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks EVO Payments, Inc. (NASDAQ:EVOP) is even less popular than NNI. Hedge funds dodged a bullet by taking a bearish stance towards EVOP. Our calculations showed that the top 20 most popular hedge fund stocks returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately EVOP wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); EVOP investors were disappointed as the stock returned -10.8% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far in 2019.
Disclosure: None. This article was originally published at Insider Monkey.
