Is World Acceptance Corp. (NASDAQ:WRLD) undervalued? The best stock pickers are turning less bullish. The number of long hedge fund bets fell by 1 in recent months.
If you’d ask most market participants, hedge funds are viewed as underperforming, old investment vehicles of the past. While there are greater than 8000 funds with their doors open today, we hone in on the bigwigs of this club, around 450 funds. Most estimates calculate that this group oversees the lion’s share of the hedge fund industry’s total capital, and by keeping an eye on their best picks, we have revealed a few investment strategies that have historically outpaced the S&P 500 index. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 24 percentage points in 7 months (see the details here).
Just as beneficial, optimistic insider trading sentiment is another way to parse down the financial markets. Just as you’d expect, there are lots of motivations for an executive to get rid of shares of his or her company, but only one, very obvious reason why they would initiate a purchase. Many academic studies have demonstrated the valuable potential of this method if “monkeys” know what to do (learn more here).
With these “truths” under our belt, we’re going to take a gander at the key action regarding World Acceptance Corp. (NASDAQ:WRLD).
What have hedge funds been doing with World Acceptance Corp. (NASDAQ:WRLD)?
At the end of the fourth quarter, a total of 8 of the hedge funds we track were bullish in this stock, a change of -11% from the previous quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their holdings substantially.
Of the funds we track, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in World Acceptance Corp. (NASDAQ:WRLD). Renaissance Technologies has a $5.5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Cliff Asness of AQR Capital Management, with a $1.7 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other hedgies that are bullish include Edward Goodnow’s Goodnow Investment Group, Ken Griffin’s Citadel Investment Group and John Overdeck and David Siegel’s Two Sigma Advisors.
Due to the fact that World Acceptance Corp. (NASDAQ:WRLD) has experienced falling interest from the entirety of the hedge funds we track, it’s easy to see that there exists a select few money managers that elected to cut their entire stakes heading into 2013. Interestingly, Paul Tudor Jones’s Tudor Investment Corp said goodbye to the largest position of the 450+ funds we watch, valued at an estimated $0.5 million in stock., and Ben Levine, Andrew Manuel and Stefan Renold of LMR Partners was right behind this move, as the fund cut about $0.4 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 1 funds heading into 2013.
What have insiders been doing with World Acceptance Corp. (NASDAQ:WRLD)?
Insider buying is most useful when the company we’re looking at has seen transactions within the past 180 days. Over the last six-month time period, World Acceptance Corp. (NASDAQ:WRLD) has experienced zero unique insiders buying, and 10 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to World Acceptance Corp. (NASDAQ:WRLD). These stocks are First Cash Financial Services, Inc. (NASDAQ:FCFS), DFC Global Corp (NASDAQ:DLLR), Nelnet, Inc. (NYSE:NNI), Cash America International, Inc. (NYSE:CSH), and PHH Corporation (NYSE:PHH). This group of stocks belong to the credit services industry and their market caps resemble WRLD’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| First Cash Financial Services, Inc. (NASDAQ:FCFS) | 7 | 0 | 4 |
| DFC Global Corp (NASDAQ:DLLR) | 8 | 0 | 1 |
| Nelnet, Inc. (NYSE:NNI) | 14 | 0 | 2 |
| Cash America International, Inc. (NYSE:CSH) | 12 | 0 | 4 |
| PHH Corporation (NYSE:PHH) | 28 | 0 | 2 |
With the results shown by Insider Monkey’s strategies, everyday investors must always keep an eye on hedge fund and insider trading activity, and World Acceptance Corp. (NASDAQ:WRLD) shareholders fit into this picture quite nicely.
