An Insider Bought Cardtronics

Cardtronics doesn’t seem to have much hedge fund interest. The two largest holders of the stock in our database of 13F filings- Tiger Cub David Gallo’s Valinor Management and billionaire Ken Griffin’s Citadel Investment Group- each cut their stake by over 50% in the third quarter. Check out Ken Griffin’s and David Gallo’s favorite stocks.

Two electronic payment services companies are Global Payments Inc (NYSE:GPN) and Euronet Worldwide, Inc. (NASDAQ:EEFT). There’s a similar expectation for dramatic improvement at these companies: on a trailing basis, their P/E multiples are 20 are or higher, while the forward P/Es are in the 11-12 range. Both peers experienced moderate revenue growth last quarter versus a year earlier, while Global Payments at least had a large drop in earnings. It seems to us that if we were going to make a call among these three companies, it would be to go with Cardtronics.

Still, Cardtronics’ customers are probably better investments than the company itself. We just aren’t sure that earnings growth will continue to be strong enough over the medium term to justify the current valuation, while large banks often trade at discounts to the book value of their equity and at P/e multiples of 10 or even lower.