Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Usio, Inc. (NASDAQ:USIO).
Is USIO a good stock to buy? The best stock pickers were in a bullish mood. The number of long hedge fund positions improved by 1 lately. Usio, Inc. (NASDAQ:USIO) was in 5 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 4. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that USIO isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 115 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Israel Englander of Millennium Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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. With all of this in mind we’re going to go over the latest hedge fund action encompassing Usio, Inc. (NASDAQ:USIO).
Do Hedge Funds Think USIO Is A Good Stock To Buy Now?
At Q1’s end, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in USIO over the last 23 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Usio, Inc. (NASDAQ:USIO) was held by Parian Global Management, which reported holding $10.9 million worth of stock at the end of December. It was followed by G2 Investment Partners Management with a $4 million position. Other investors bullish on the company included Renaissance Technologies, Citadel Investment Group, and Millennium Management. In terms of the portfolio weights assigned to each position Parian Global Management allocated the biggest weight to Usio, Inc. (NASDAQ:USIO), around 4.99% of its 13F portfolio. G2 Investment Partners Management is also relatively very bullish on the stock, setting aside 0.63 percent of its 13F equity portfolio to USIO.
As aggregate interest increased, specific money managers were leading the bulls’ herd. G2 Investment Partners Management, managed by Josh Goldberg, assembled the largest position in Usio, Inc. (NASDAQ:USIO). G2 Investment Partners Management had $4 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 go over hedge fund activity in other stocks – not necessarily in the same industry as Usio, Inc. (NASDAQ:USIO) but similarly valued. These stocks are Metacrine, Inc. (NASDAQ:MTCR), Concert Pharmaceuticals Inc (NASDAQ:CNCE), Greenpro Capital Corp. (NASDAQ:GRNQ), Oriental Culture Holding LTD (NASDAQ:OCG), Meridian Corporation (NASDAQ:MRBK), Cherry Hill Mortgage Investment Corp (NYSE:CHMI), and Fennec Pharmaceuticals Inc. (NASDAQ:FENC). This group of stocks’ market caps are similar to USIO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MTCR | 7 | 7864 | 0 |
| CNCE | 14 | 39225 | -4 |
| GRNQ | 3 | 622 | 2 |
| OCG | 2 | 573 | 1 |
| MRBK | 5 | 9824 | 2 |
| CHMI | 4 | 11164 | -3 |
| FENC | 6 | 62743 | 0 |
| Average | 5.9 | 18859 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.9 hedge funds with bullish positions and the average amount invested in these stocks was $19 million. That figure was $19 million in USIO’s case. Concert Pharmaceuticals Inc (NASDAQ:CNCE) is the most popular stock in this table. On the other hand Oriental Culture Holding LTD (NASDAQ:OCG) is the least popular one with only 2 bullish hedge fund positions. Usio, Inc. (NASDAQ:USIO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for USIO is 48.5. 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 negative signal and 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 17.4% in 2021 through June 18th and surpassed the market again by 6.1 percentage points. Unfortunately USIO wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); USIO investors were disappointed as the stock returned 1.2% since the end of March (through 6/18) 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 most of these stocks already outperformed the market in 2021.
Disclosure: None. This article was originally published at Insider Monkey.