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Do Hedge Funds and Insiders Love Euronet Worldwide, Inc. (EEFT)?: Heartland Payment Systems, Inc. (HPY), Cardtronics, Inc. (CATM)

Euronet Worldwide, Inc. (NASDAQ:EEFT) has seen a decrease in enthusiasm from smart money recently.

Euronet Worldwide, Inc. (NASDAQ:EEFT)

If you’d ask most traders, hedge funds are viewed as worthless, old financial vehicles of the past. While there are over 8000 funds in operation at the moment, we look at the masters of this group, about 450 funds. It is widely believed that this group controls the majority of the hedge fund industry’s total capital, and by monitoring their highest performing equity investments, we have uncovered a few investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 24 percentage points in 7 months (see the details here).

Just as integral, optimistic insider trading activity is another way to parse down the financial markets. Just as you’d expect, there are many reasons for a bullish insider to sell shares of his or her company, but just one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the useful potential of this tactic if investors understand what to do (learn more here).

With all of this in mind, we’re going to take a look at the latest action encompassing Euronet Worldwide, Inc. (NASDAQ:EEFT).

How are hedge funds trading Euronet Worldwide, Inc. (NASDAQ:EEFT)?

In preparation for this year, a total of 10 of the hedge funds we track held long positions in this stock, a change of -23% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were upping their holdings significantly.

When looking at the hedgies we track, Dreman Value Management, managed by David Dreman, holds the biggest position in Euronet Worldwide, Inc. (NASDAQ:EEFT). Dreman Value Management has a $9 million position in the stock, comprising 0.3% of its 13F portfolio. Coming in second is Renaissance Technologies, managed by Jim Simons, which held a $2 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions include Ken Griffin’s Citadel Investment Group, John Overdeck and David Siegel’s Two Sigma Advisors and Neil Chriss’s Hutchin Hill Capital.

Judging by the fact that Euronet Worldwide, Inc. (NASDAQ:EEFT) has witnessed falling interest from the smart money, it’s easy to see that there were a few money managers that elected to cut their positions entirely heading into 2013. At the top of the heap, Israel Englander’s Millennium Management said goodbye to the largest position of all the hedgies we key on, worth close to $2 million in stock., and Mike Vranos of Ellington was right behind this move, as the fund cut about $1 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds heading into 2013.

What do corporate executives and insiders think about Euronet Worldwide, Inc. (NASDAQ:EEFT)?

Insider purchases made by high-level executives is at its handiest when the primary stock in question has seen transactions within the past half-year. Over the last 180-day time frame, Euronet Worldwide, Inc. (NASDAQ:EEFT) has experienced zero unique insiders buying, and 4 insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Euronet Worldwide, Inc. (NASDAQ:EEFT). These stocks are Heartland Payment Systems, Inc. (NYSE:HPY), Cardtronics, Inc. (NASDAQ:CATM), SYNNEX Corporation (NYSE:SNX), Interval Leisure Group, Inc. (NASDAQ:IILG), and VistaPrint Limited (NASDAQ:VPRT). This group of stocks belong to the business services industry and their market caps resemble EEFT’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Heartland Payment Systems, Inc. (NYSE:HPY) 11 1 2
Cardtronics, Inc. (NASDAQ:CATM) 9 1 5
SYNNEX Corporation (NYSE:SNX) 7 0 4
Interval Leisure Group, Inc. (NASDAQ:IILG) 9 0 0
VistaPrint Limited (NASDAQ:VPRT) 9 3 3

With the results exhibited by our strategies, retail investors should always watch hedge fund and insider trading sentiment, and Euronet Worldwide, Inc. (NASDAQ:EEFT) is an important part of this process.

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