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Do Hedge Funds Love Net 1 UEPS Technologies Inc (UEPS)?

Is Net 1 UEPS Technologies Inc (NASDAQ:UEPS) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy league graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments (for some reason media paid a ton of attention to Ackman’s gigantic JC Penney and Valeant failures) and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.

Is Net 1 UEPS Technologies Inc (NASDAQ:UEPS) a good stock to buy now? Prominent investors are getting more optimistic. The number of bullish hedge fund bets inched up by 2 recently. Net 1 UEPS Technologies Inc (NASDAQ:UEPS) was in 21 hedge funds’ portfolios at the end of September. There were 19 hedge funds in our database with Net 1 UEPS Technologies Inc (NASDAQ:UEPS) holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Constant Contact Inc (NASDAQ:CTCT), Innophos Holdings, Inc. (NASDAQ:IPHS), and Saia Inc (NASDAQ:SAIA) to gather more data points.

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At the moment, there are numerous indicators stock traders use to size up stocks. A duo of the less utilized indicators are hedge fund and insider trading activity. We have shown that, historically, those who follow the top picks of the elite money managers can outpace the S&P 500 by a superb margin (see the details here).

Now, let’s analyze the new action encompassing Net 1 UEPS Technologies Inc (NASDAQ:UEPS).

Hedge fund activity in Net 1 UEPS Technologies Inc (NASDAQ:UEPS)

At the end of the third quarter, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 11% from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, International Value Advisers, managed by Charles de Vaulx, holds the most valuable position in Net 1 UEPS Technologies Inc (NASDAQ:UEPS). International Value Advisers has a $139.1 million position in the stock, comprising 3.7% of its 13F portfolio. On International Value Advisers’s heels is Porter Collins, Daniel Moses, and Vincent Daniel of Seawolf Capital, with a $29.6 million position; the fund has 7.4% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions consist of D E Shaw, Renaissance Technologies and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Consequently, key money managers have been driving this bullishness. Nine Chapters Capital Management, managed by Chao Ku, established the most valuable position in Net 1 UEPS Technologies Inc (NASDAQ:UEPS). Nine Chapters Capital Management had $0.9 million invested in the company at the end of the quarter. Peter Algert and Kevin Coldiron’s Algert Coldiron Investors also initiated a $0.6 million position during the quarter. The other funds with brand new UEPS positions are Matthew Tewksbury’s Stevens Capital Management and Brian Ashford-Russell and Tim Woolley’s Polar Capital.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Net 1 UEPS Technologies Inc (NASDAQ:UEPS) but similarly valued. These stocks are Constant Contact Inc (NASDAQ:CTCT), Innophos Holdings, Inc. (NASDAQ:IPHS), Saia Inc (NASDAQ:SAIA), and Atento SA (NYSE:ATTO). This group of stock market caps resembles UEPS’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CTCT 17 134366 1
IPHS 22 68600 8
SAIA 20 162892 9
ATTO 5 28862 -2

As you can see, these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $99 million, versus $242 million in Net 1 UEPS Technologies Inc (NASDAQ:UEPS)’s case. Innophos Holdings, Inc. (NASDAQ:IPHS) is the most popular stock in this table, while Net 1 UEPS Technologies Inc (NASDAQ: UEPS) registers a slightly lower interest from hedge funds. This suggests that Net 1 UEPS may be an interesting investment opportunity and therefore it’s worth it to do a more detailed analysis before adding it to your portfolio.

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