Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Net 1 UEPS Technologies Inc (NASDAQ:UEPS), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is Net 1 UEPS Technologies Inc (NASDAQ:UEPS) the right investment to pursue these days? The smart money was becoming hopeful. The number of long hedge fund positions rose by 2 lately. Net 1 UEPS Technologies Inc (NASDAQ:UEPS) was in 10 hedge funds’ portfolios at the end of June. The all time high for this statistic is 22. Our calculations also showed that UEPS isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
David E. Shaw of D.E. Shaw
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to go over the latest hedge fund action surrounding Net 1 UEPS Technologies Inc (NASDAQ:UEPS).
Do Hedge Funds Think UEPS Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from the first quarter of 2020. By comparison, 14 hedge funds held shares or bullish call options in UEPS a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, David Rosen’s Rubric Capital Management has the largest position in Net 1 UEPS Technologies Inc (NASDAQ:UEPS), worth close to $5.4 million, corresponding to 0.3% of its total 13F portfolio. The second largest stake is held by Hosking Partners, managed by Jeremy Hosking, which holds a $2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism comprise D. E. Shaw’s D E Shaw, Renaissance Technologies and David Harding’s Winton Capital Management. In terms of the portfolio weights assigned to each position Rubric Capital Management allocated the biggest weight to Net 1 UEPS Technologies Inc (NASDAQ:UEPS), around 0.34% of its 13F portfolio. Full18 Capital is also relatively very bullish on the stock, setting aside 0.06 percent of its 13F equity portfolio to UEPS.
Consequently, key hedge funds have been driving this bullishness. Full18 Capital, managed by Allon Hellmann, established the most outsized position in Net 1 UEPS Technologies Inc (NASDAQ:UEPS). Full18 Capital had $0.1 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $0.1 million investment in the stock during the quarter.
Let’s also examine hedge fund activity in other stocks similar to Net 1 UEPS Technologies Inc (NASDAQ:UEPS). We will take a look at Inmune Bio Inc. (NASDAQ:INMB), Clever Leaves Holdings Inc. (NASDAQ:CLVR), Northrim BanCorp, Inc. (NASDAQ:NRIM), Ovid Therapeutics Inc. (NASDAQ:OVID), Infinity Pharmaceuticals Inc. (NASDAQ:INFI), Ur-Energy Inc. (NYSE:URG), and NantHealth, Inc. (NASDAQ:NH). This group of stocks’ market valuations are similar to UEPS’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| INMB | 2 | 3565 | -1 |
| CLVR | 4 | 27929 | -4 |
| NRIM | 10 | 12144 | 3 |
| OVID | 15 | 72598 | 1 |
| INFI | 15 | 60143 | 0 |
| URG | 4 | 8873 | 0 |
| NH | 5 | 461 | 2 |
| Average | 7.9 | 26530 | 0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.9 hedge funds with bullish positions and the average amount invested in these stocks was $27 million. That figure was $11 million in UEPS’s case. Ovid Therapeutics Inc. (NASDAQ:OVID) is the most popular stock in this table. On the other hand Inmune Bio Inc. (NASDAQ:INMB) is the least popular one with only 2 bullish hedge fund positions. Net 1 UEPS Technologies Inc (NASDAQ:UEPS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for UEPS is 51.4. 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. 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 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 25.7% in 2021 through September 27th and beat the market again by 6.2 percentage points. Unfortunately UEPS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on UEPS were disappointed as the stock returned -0.2% since the end of June (through 9/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
