The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded Enova International Inc (NYSE:ENVA) and determine whether the smart money was really smart about this stock.
Enova International Inc (NYSE:ENVA) investors should pay attention to an increase in hedge fund sentiment in recent months. Enova International Inc (NYSE:ENVA) was in 21 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 23. There were 17 hedge funds in our database with ENVA positions at the end of the first quarter. Our calculations also showed that ENVA isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most shareholders, hedge funds are seen as underperforming, outdated investment vehicles of years past. While there are over 8000 funds trading at present, Our experts hone in on the bigwigs of this club, about 850 funds. Most estimates calculate that this group of people command bulk of all hedge funds’ total capital, and by keeping track of their highest performing picks, Insider Monkey has brought to light a few investment strategies that have historically exceeded the broader indices. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 34% since February 2017 (through August 17th) even though the market was up 53% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Michael Hintze of CQS Cayman LP
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost precious metals prices. So, we are checking out this junior gold mining stock. We are also checking out this lithium company which could benefit from the electric car adoption. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. With all of this in mind we’re going to analyze the fresh hedge fund action regarding Enova International Inc (NYSE:ENVA).
How are hedge funds trading Enova International Inc (NYSE:ENVA)?
At the end of the second quarter, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of 24% from the previous quarter. By comparison, 20 hedge funds held shares or bullish call options in ENVA 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.
The largest stake in Enova International Inc (NYSE:ENVA) was held by Renaissance Technologies, which reported holding $34.2 million worth of stock at the end of September. It was followed by 683 Capital Partners with a $17.1 million position. Other investors bullish on the company included Prescott Group Capital Management, Empyrean Capital Partners, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Prescott Group Capital Management allocated the biggest weight to Enova International Inc (NYSE:ENVA), around 3.14% of its 13F portfolio. Voce Capital is also relatively very bullish on the stock, earmarking 1.74 percent of its 13F equity portfolio to ENVA.
As one would reasonably expect, key money managers were breaking ground themselves. Empyrean Capital Partners, managed by Michael A. Price and Amos Meron, created the most valuable position in Enova International Inc (NYSE:ENVA). Empyrean Capital Partners had $5.9 million invested in the company at the end of the quarter. Michael Hintze’s CQS Cayman LP also made a $2.2 million investment in the stock during the quarter. The following funds were also among the new ENVA investors: David Harding’s Winton Capital Management, Michael Gelband’s ExodusPoint Capital, and Greg Eisner’s Engineers Gate Manager.
Let’s now take a look at hedge fund activity in other stocks similar to Enova International Inc (NYSE:ENVA). These stocks are Clean Energy Fuels Corp (NASDAQ:CLNE), Arrow Financial Corporation (NASDAQ:AROW), Dorchester Minerals LP (NASDAQ:DMLP), Intersect ENT Inc (NASDAQ:XENT), Yintech Investment Holdings Limited (NASDAQ:YIN), Everi Holdings Inc (NYSE:EVRI), and CooTek (Cayman) Inc. (NYSE:CTK). This group of stocks’ market values match ENVA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CLNE | 11 | 23539 | 3 |
| AROW | 3 | 13185 | -1 |
| DMLP | 6 | 17949 | 0 |
| XENT | 17 | 80027 | -3 |
| YIN | 1 | 629 | 0 |
| EVRI | 23 | 85430 | -1 |
| CTK | 2 | 1118 | 1 |
| Average | 9 | 31697 | -0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $32 million. That figure was $87 million in ENVA’s case. Everi Holdings Inc (NYSE:EVRI) is the most popular stock in this table. On the other hand Yintech Investment Holdings Limited (NASDAQ:YIN) is the least popular one with only 1 bullish hedge fund positions. Enova International Inc (NYSE:ENVA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ENVA is 81.8. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 24.8% in 2020 through the end of September and still beat the market by 19.3 percentage points. Hedge funds were also right about betting on ENVA, though not to the same extent, as the stock returned 10.2% in Q3 and outperformed the market as well.
Follow Enova International Inc. (NYSE:ENVA)
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Disclosure: None. This article was originally published at Insider Monkey.
