We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of EZCORP Inc (NASDAQ:EZPW) based on that data.
EZCORP Inc (NASDAQ:EZPW) shareholders have witnessed a decrease in activity from the world’s largest hedge funds lately. EZPW was in 15 hedge funds’ portfolios at the end of the first quarter of 2020. There were 21 hedge funds in our database with EZPW holdings at the end of the previous quarter. Our calculations also showed that EZPW isn’t among the 30 most popular stocks among hedge funds (click for Q1 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 financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Noam Gottesman of GLG Partners
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, blockchain technology’s influence will go beyond online payments. So, we are checking out this futurist’s moonshot opportunities in tech stocks. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to check out the recent hedge fund action regarding EZCORP Inc (NASDAQ:EZPW).
What have hedge funds been doing with EZCORP Inc (NASDAQ:EZPW)?
At the end of the first quarter, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of -29% from the fourth quarter of 2019. By comparison, 20 hedge funds held shares or bullish call options in EZPW a year ago. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
The largest stake in EZCORP Inc (NASDAQ:EZPW) was held by Lafitte Capital Management, which reported holding $22.5 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $12.4 million position. Other investors bullish on the company included Archon Capital Management, Millennium Management, and Winton Capital Management. In terms of the portfolio weights assigned to each position Lafitte Capital Management allocated the biggest weight to EZCORP Inc (NASDAQ:EZPW), around 51.57% of its 13F portfolio. Archon Capital Management is also relatively very bullish on the stock, dishing out 2.47 percent of its 13F equity portfolio to EZPW.
Judging by the fact that EZCORP Inc (NASDAQ:EZPW) has witnessed bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there exists a select few hedge funds that decided to sell off their entire stakes last quarter. Interestingly, Michael A. Price and Amos Meron’s Empyrean Capital Partners dumped the biggest stake of all the hedgies followed by Insider Monkey, comprising about $4.8 million in stock. Jerome L. Simon’s fund, Lonestar Capital Management, also dropped its stock, about $2 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 6 funds last quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as EZCORP Inc (NASDAQ:EZPW) but similarly valued. These stocks are RISE Education Cayman Ltd (NASDAQ:REDU), GameStop Corp. (NYSE:GME), Entercom Communications Corp. (NYSE:ETM), and Tellurian Inc. (NASDAQ:TELL). This group of stocks’ market valuations match EZPW’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| REDU | 2 | 733 | -1 |
| GME | 17 | 43259 | -3 |
| ETM | 17 | 13101 | -6 |
| TELL | 6 | 1521 | -5 |
| Average | 10.5 | 14654 | -3.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $15 million. That figure was $50 million in EZPW’s case. GameStop Corp. (NYSE:GME) is the most popular stock in this table. On the other hand RISE Education Cayman Ltd (NASDAQ:REDU) is the least popular one with only 2 bullish hedge fund positions. EZCORP Inc (NASDAQ:EZPW) is not the most popular stock in this group but hedge fund interest is still above 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 13.3% in 2020 through June 25th but still beat the market by 16.8 percentage points. Hedge funds were also right about betting on EZPW as the stock returned 49.6% in Q2 (through June 25th) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
