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EZ Corp (EZPW) Has Fallen 35% in Last One Year, Underperforms Market

If you are looking for the best ideas for your portfolio you may want to consider some of Laughing Water Capital’s top stock picks. Laughing Water Capital, an investment management firm, is bullish on EZ Corp Inc (NASDAQ:EZPW) stock. In its Q2 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on EZ Corp Inc (NASDAQ:EZPW) stock. EZ Corp Inc (NASDAQ:EZPW) is a pawn shop operator.

In July 2019, Laughing Water Capital had released its Q2 2019 investor letter. The investment firm said that EZ Corp Inc (NASDAQ:EZPW) was a mid-sized position in its portfolio. EZ Corp Inc (NASDAQ:EZPW) stock has posted a return of -35.3% in the trailing one year period, underperforming fund’s benchmark the S&P 500 Index which returned 13.3% in the same period. This suggests that the investment firm was wrong in its decision. On a year-to-date basis, EZ Corp Inc (NASDAQ:EZPW) stock has fallen by 22.1%.

Laughing Water Capital fund posted a return of 10.3% in the second quarter of 2019, outperforming fund’s benchmark the S&P 500 Index which returned 4.30% in the same period. Let’s take a look at comments made by Laughing Water Capital about EZ Corp Inc (NASDAQ:EZPW) stock in the Q2 2019 investor letter.

“EZ Corp (EZPW) – EZPW, our pawn business, has fallen out of the top five as our more defensive investments were sized up. This is a recession proof business operating in the depths of its cycle with interesting growth prospects that is trading at a very low cash flow valuation, below break up value, and at an absurdly low relative value. Corporate governance remains less than ideal, but the company has taken steps in the right direction by revamping their board of directors, and linking management pay with per share metrics. Further, the company recently began work on a new digital initiative which is likely to drive traffic, and attract a new class of investors who are focused on fin-tech. EZPW remains a mid-sized position in our portfolio.”

Ghost Tree Capital's AUM, Returns and Holdings

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In July, we published an article revealing Blue Tower Asset Management’s bullish investment thesis on EZ Corp Inc (NASDAQ:EZPW) stock. The investment firm believes that the company would emerge stronger from the coronavirus crisis.

In Q1 2020, the number of bullish hedge fund positions on EZ Corp Inc (NASDAQ:EZPW) stock decreased by about 29% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with EZ Corp’s growth potential. Our calculations showed that EZ Corp Inc (NASDAQ:EZPW) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost precious metals prices. So, we are checking out this junior gold mining stock. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. You can subscribe to our free enewsletter below to receive our stories in your inbox:

Disclosure: None. This article is originally published at Insider Monkey.