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Hedge Funds Are Betting On Cardtronics plc (CATM)

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow over 700 of the best-performing investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Cardtronics plc (NASDAQ:CATM), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Cardtronics plc (NASDAQ:CATM) investors should be aware of an increase in activity from the world’s largest hedge funds recently. CATM was in 18 hedge funds’ portfolios at the end of September. There were 15 hedge funds in our database with CATM positions at the end of the previous quarter. Our calculations also showed that CATM isn’t among the 30 most popular stocks among hedge funds.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

John Overdeck of Two Sigma

We’re going to review the recent hedge fund action surrounding Cardtronics plc (NASDAQ:CATM).

How have hedgies been trading Cardtronics plc (NASDAQ:CATM)?

Heading into the fourth quarter of 2018, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from one quarter earlier. By comparison, 15 hedge funds held shares or bullish call options in CATM heading into this year. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

CATM_dec2018

According to Insider Monkey’s hedge fund database, Hudson Executive Capital, managed by Douglas Braunstein and James Wooleryá, holds the number one position in Cardtronics plc (NASDAQ:CATM). Hudson Executive Capital has a $257.1 million position in the stock, comprising 20.8% of its 13F portfolio. Coming in second is D E Shaw, led by D. E. Shaw, holding a $22.6 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining peers that are bullish encompass Israel Englander’s Millennium Management, Jim Simons’s Renaissance Technologies and John Overdeck and David Siegel’s Two Sigma Advisors.

As aggregate interest increased, key hedge funds have been driving this bullishness. Renaissance Technologies, managed by Jim Simons, created the largest position in Cardtronics plc (NASDAQ:CATM). Renaissance Technologies had $16.1 million invested in the company at the end of the quarter. Michael Platt and William Reeves’s BlueCrest Capital Mgmt. also initiated a $1.4 million position during the quarter. The other funds with brand new CATM positions are John Ku’s Manor Road Capital Partners and David Costen Haley’s HBK Investments.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Cardtronics plc (NASDAQ:CATM) but similarly valued. We will take a look at Deciphera Pharmaceuticals, Inc. (NASDAQ:DCPH), Gibraltar Industries Inc (NASDAQ:ROCK), Helix Energy Solutions Group Inc. (NYSE:HLX), and Herc Holdings Inc. (NYSE:HRI). All of these stocks’ market caps are closest to CATM’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DCPH 16 256895 -1
ROCK 12 124889 1
HLX 16 59869 -1
HRI 24 667633 1
Average 17 277322 0

View table here if you experience formatting issues.

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $277 million. That figure was $352 million in CATM’s case. Herc Holdings Inc. (NYSE:HRI) is the most popular stock in this table. On the other hand Gibraltar Industries Inc (NASDAQ:ROCK) is the least popular one with only 12 bullish hedge fund positions. Cardtronics plc (NASDAQ:CATM) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard HRI might be a better candidate to consider a long position.

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

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