Do Hedge Funds Love Diginex Limited (EQOS)?

We at Insider Monkey have gone over 866 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article, we look at what those funds think of Diginex Limited (NASDAQ:EQOS) based on that data.

Is Diginex Limited (NASDAQ:EQOS) worth your attention right now? Money managers were in an optimistic mood. The number of bullish hedge fund bets increased by 3 recently. Diginex Limited (NASDAQ:EQOS) was in 4 hedge funds’ portfolios at the end of March. The all time high for this statistic was previously 1. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that EQOS isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $29 biotech stock for $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. Now we’re going to take a gander at the latest hedge fund action encompassing Diginex Limited (NASDAQ:EQOS).

Do Hedge Funds Think EQOS Is A Good Stock To Buy Now?

Heading into the second quarter of 2021, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 300% from one quarter earlier. On the other hand, there were a total of 0 hedge funds with a bullish position in EQOS a year ago. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Phill Gross and Robert Atchinson’s Adage Capital Management has the biggest position in Diginex Limited (NASDAQ:EQOS), worth close to $6.4 million, corresponding to less than 0.1%% of its total 13F portfolio. The second most bullish fund manager is Bart Baum of Ionic Capital Management, with a $3.1 million position; 0.4% of its 13F portfolio is allocated to the company. Other professional money managers that are bullish comprise Ken Griffin’s Citadel Investment Group, Ken Griffin’s Citadel Investment Group and Matthew Hulsizer’s PEAK6 Capital Management. In terms of the portfolio weights assigned to each position Ionic Capital Management allocated the biggest weight to Diginex Limited (NASDAQ:EQOS), around 0.4% of its 13F portfolio. Adage Capital Management is also relatively very bullish on the stock, earmarking 0.01 percent of its 13F equity portfolio to EQOS.

As aggregate interest increased, key hedge funds were leading the bulls’ herd. Adage Capital Management, managed by Phill Gross and Robert Atchinson, established the most outsized position in Diginex Limited (NASDAQ:EQOS). Adage Capital Management had $6.4 million invested in the company at the end of the quarter. Bart Baum’s Ionic Capital Management also made a $3.1 million investment in the stock during the quarter. The following funds were also among the new EQOS investors: Ken Griffin’s Citadel Investment Group, Ken Griffin’s Citadel Investment Group, and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Diginex Limited (NASDAQ:EQOS) but similarly valued. We will take a look at ShotSpotter, Inc. (NASDAQ:SSTI), Tuniu Corporation (NASDAQ:TOUR), Diamond S Shipping Inc. (NYSE:DSSI), Hometrust Bancshares Inc (NASDAQ:HTBI), Gladstone Investment Corporation (NASDAQ:GAIN), IBEX Limited (NASDAQ:IBEX), and Autolus Therapeutics plc (NASDAQ:AUTL). All of these stocks’ market caps match EQOS’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 7.3 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $10 million in EQOS’s case. Autolus Therapeutics plc (NASDAQ:AUTL) is the most popular stock in this table. On the other hand IBEX Limited (NASDAQ:IBEX) is the least popular one with only 3 bullish hedge fund positions. Diginex Limited (NASDAQ:EQOS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for EQOS is 43. 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 17.2% in 2021 through June 11th and surpassed the market again by 3.3 percentage points. Unfortunately EQOS wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); EQOS investors were disappointed as the stock returned -25.3% since the end of March (through 6/11) 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.