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. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Evertec Inc (NYSE:EVTC).
Evertec Inc (NYSE:EVTC) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 19 hedge funds’ portfolios at the end of the first quarter of 2020. At the end of this article we will also compare EVTC to other stocks including Capitol Federal Financial, Inc. (NASDAQ:CFFN), CONMED Corporation (NYSE:CNMD), and Acadia Healthcare Company Inc (NASDAQ:ACHC) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Peter Rathjens of Arrowstreet Capital
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to check out the fresh hedge fund action surrounding Evertec Inc (NYSE:EVTC).
How are hedge funds trading Evertec Inc (NYSE:EVTC)?
At Q1’s end, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. By comparison, 21 hedge funds held shares or bullish call options in EVTC a year ago. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
Among these funds, Rivulet Capital held the most valuable stake in Evertec Inc (NYSE:EVTC), which was worth $102.2 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $53.6 million worth of shares. GLG Partners, Arrowstreet Capital, and Millennium Management 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 Rivulet Capital allocated the biggest weight to Evertec Inc (NYSE:EVTC), around 6.55% of its 13F portfolio. Weld Capital Management is also relatively very bullish on the stock, dishing out 0.19 percent of its 13F equity portfolio to EVTC.
Judging by the fact that Evertec Inc (NYSE:EVTC) has experienced bearish sentiment from hedge fund managers, logic holds that there is a sect of hedgies that slashed their entire stakes heading into Q4. Interestingly, Paul Marshall and Ian Wace’s Marshall Wace LLP said goodbye to the largest stake of the “upper crust” of funds monitored by Insider Monkey, valued at an estimated $2.6 million in stock. Peter Muller’s fund, PDT Partners, also cut its stock, about $1.8 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 – not necessarily in the same industry as Evertec Inc (NYSE:EVTC) but similarly valued. We will take a look at Capitol Federal Financial, Inc. (NASDAQ:CFFN), CONMED Corporation (NYSE:CNMD), Acadia Healthcare Company Inc (NASDAQ:ACHC), and Aurinia Pharmaceuticals Inc (NASDAQ:AUPH). All of these stocks’ market caps match EVTC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CFFN | 11 | 108700 | -5 |
| CNMD | 29 | 207132 | -2 |
| ACHC | 24 | 272616 | -4 |
| AUPH | 28 | 482900 | 7 |
| Average | 23 | 267837 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $268 million. That figure was $198 million in EVTC’s case. CONMED Corporation (NYSE:CNMD) is the most popular stock in this table. On the other hand Capitol Federal Financial, Inc. (NASDAQ:CFFN) is the least popular one with only 11 bullish hedge fund positions. Evertec Inc (NYSE:EVTC) is not the least popular stock in this group but hedge fund interest is still below average. 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 13.4% in 2020 through June 22nd but beat the market by 15.9 percentage points. A small number of hedge funds were also right about betting on EVTC, though not to the same extent, as the stock returned 24.8% during the second quarter and outperformed the market.
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Disclosure: None. This article was originally published at Insider Monkey.
