Here is What Hedge Funds Think About Net 1 UEPS Technologies Inc (UEPS)

We have been waiting for this for a year and finally the third quarter ended up showing a nice bump in the performance of small-cap stocks. Both the S&P 500 and Russell 2000 were up since the end of the second quarter, but small-cap stocks outperformed the large-cap stocks by double digits. This is important for hedge funds, which are big supporters of small-cap stocks, because their investors started pulling some of their capital out due to poor recent performance. It is very likely that equity hedge funds will deliver better risk adjusted returns in the second half of this year. In this article we are going to look at how this recent market trend affected the sentiment of hedge funds towards Net 1 UEPS Technologies Inc (NASDAQ:UEPS), and what that likely means for the prospects of the company and its stock.

Net 1 UEPS Technologies Inc (NASDAQ:UEPS) investors should be aware of an increase in activity from the world’s largest hedge funds in recent months. UEPS was in 19 hedge funds’ portfolios at the end of September. There were 18 hedge funds in our database with UEPS positions at the end of the previous quarter. 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 CEVA, Inc. (NASDAQ:CEVA), Investment Technology Group (NYSE:ITG), and EPIQ Systems, Inc. (NASDAQ:EPIQ) to gather more data points.

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What have hedge funds been doing with Net 1 UEPS Technologies Inc (NASDAQ:UEPS)?

At the end of the third quarter, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 6% from the previous quarter. By comparison, 22 hedge funds held shares or bullish call options in UEPS heading into this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, William B. Gray’s Orbis Investment Management has the most valuable position in Net 1 UEPS Technologies Inc (NASDAQ:UEPS), worth close to $77.3 million. On Orbis Investment Management’s heels is Charles de Vaulx of International Value Advisers, with a $62.5 million position; the fund has 1.8% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish contain Jim Simons’ Renaissance Technologies, D. E. Shaw’s D E Shaw and Phil Frohlich’s Prescott Group Capital Management. We should note that Orbis Investment Management is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

As aggregate interest increased, some big names have jumped into Net 1 UEPS Technologies Inc (NASDAQ:UEPS) headfirst. Bailard Inc, led by Thomas Bailard, created the largest position in Net 1 UEPS Technologies Inc (NASDAQ:UEPS). Bailard Inc had $0.3 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.2 million position during the quarter. Another fund with brand new UEPS position is Chao Ku’s Nine Chapters Capital Management.

Let’s now take a look at hedge fund activity in other stocks similar to Net 1 UEPS Technologies Inc (NASDAQ:UEPS). These stocks are CEVA, Inc. (NASDAQ:CEVA), Investment Technology Group (NYSE:ITG), EPIQ Systems, Inc. (NASDAQ:EPIQ), and Nautilus, Inc. (NYSE:NLS). All of these stocks’ market caps are closest to UEPS’s market cap.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $79 million. That figure was $196 million in UEPS’s case. CEVA, Inc. (NASDAQ:CEVA) is the most popular stock in this table. On the other hand EPIQ Systems, Inc. (NASDAQ:EPIQ) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Net 1 UEPS Technologies Inc (NASDAQ:UEPS) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Disclosure: None