In this article, we discuss the top 5 stock picks of Travis Cocke’s Voss Capital. If you want our detailed analysis of these stocks, go directly to Top 10 Stock Picks of Travis Cocke’s Voss Capital.
5. International Money Express, Inc. (NASDAQ:IMXI)
Voss Capital’s Stake Value: $16,783,000
Percentage of Voss Capital’s 13F Portfolio: 6.89%
Number of Hedge Fund Holders: 19
International Money Express, Inc. (NASDAQ:IMXI) is a Miami-based company that offers money remittance services in the United States, Latin America, Mexico, Africa, Central and South America, and the Caribbean. The company also provides financial processing solutions and payment services such as online payment options, prepaid debit cards, and direct deposit payroll cards.
Voss Capital purchased a stake in International Money Express, Inc. (NASDAQ:IMXI) in Q2 2021, buying 766,467 shares of the company, worth $11.3 million. The hedge fund elevated its position in International Money Express, Inc. (NASDAQ:IMXI) in the third quarter of 2021 by 31.12%, holding more than 1 million shares amounting to $16.7 million. The stock accounts for 6.89% of Travis Cocke’s third quarter investments.
On November 4, Credit Suisse analyst Nik Cremo maintained International Money Express, Inc. (NASDAQ:IMXI) with a Neutral rating and raised the price target on the shares from $18.5 to $19.
Headlands Capital is the leading stakeholder of International Money Express, Inc. (NASDAQ:IMXI) as of Q3 2021, with 1.6 million shares worth $28.3 million. Overall, 19 hedge funds were bullish on the stock in the third quarter.
Here is what Voss Capital has to say about International Money Express, Inc. (NASDAQ:IMXI) in its Q2 2021 investor letter:
“We believe Intermex (International Money Express, IMXI) is a compelling long. IMXI is an international money remittance company that focuses primarily on transactions emanating from the United States and going to Mexico and Guatemala. They make their money by charging a fixed fee for each remittance transaction (85% of revenue), and to a lesser degree from foreign exchange arbitrage on transactions (14%). Their customer base is primarily low-income and under-banked immigrants from Mexico and Guatemala with family/friends remaining in their home country that need financial support. We believe IMXI is a simple story to understand, with a clean capital structure, very low capital intensity (outside of some working capital swings), a strong brand, savvy management, and excellent ongoing execution (e.g., 15-20% growth at high incremental margins). We believe there are flaws in the negative narrative surrounding the company that we can exploit, namely the skepticism around the sustainability of its growth, the stickiness of the customer base, and a misunderstanding about the economics of a digital remittance transaction versus in-person.
The consensus narrative on Wall Street is that IMXI is making a strategic error by not going “all in” on digital transactions, as MoneyGram (MGI), Western Union (WU), and well-backed private competitors like Remitly and Wise are. You will hear that the wave of VC money shows you what the future beholds, and remittances initiated via physical brick & mortar stores are dying. As the digital transition occurs, Intermex will lose their customer base, and given the operating leverage in the model, profitability will be hit hard. Bears also argue that digital is cheaper, easier, and should create a stickier customer base in the long term. Furthermore, Intermex’s focus on only a few markets makes it hard to scale the business and they will quickly run into a wall on growth. (Click here to read the full text)
