In this article we will take a look at whether hedge funds think Euronet Worldwide, Inc. (NASDAQ:EEFT) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is Euronet Worldwide, Inc. (NASDAQ:EEFT) ready to rally soon? Investors who are in the know were in a pessimistic mood. The number of long hedge fund bets went down by 2 recently. Euronet Worldwide, Inc. (NASDAQ:EEFT) was in 38 hedge funds’ portfolios at the end of September. The all time high for this statistic is 47. Our calculations also showed that EEFT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 40 hedge funds in our database with EEFT positions at the end of the second quarter.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. With all of this in mind we’re going to take a glance at the latest hedge fund action surrounding Euronet Worldwide, Inc. (NASDAQ:EEFT).
Michael Gelband of ExodusPoint Capital
Do Hedge Funds Think EEFT Is A Good Stock To Buy Now?
At the end of September, a total of 38 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -5% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards EEFT over the last 25 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Among these funds, Joho Capital held the most valuable stake in Euronet Worldwide, Inc. (NASDAQ:EEFT), which was worth $59.8 million at the end of the third quarter. On the second spot was ExodusPoint Capital which amassed $41.7 million worth of shares. Cardinal Capital, LMR Partners, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Joho Capital allocated the biggest weight to Euronet Worldwide, Inc. (NASDAQ:EEFT), around 8.04% of its 13F portfolio. Strycker View Capital is also relatively very bullish on the stock, dishing out 6.06 percent of its 13F equity portfolio to EEFT.
Because Euronet Worldwide, Inc. (NASDAQ:EEFT) has faced falling interest from hedge fund managers, it’s easy to see that there were a few funds that decided to sell off their positions entirely in the third quarter. Intriguingly, Howard Marks’s Oaktree Capital Management sold off the largest stake of the 750 funds tracked by Insider Monkey, worth close to $6.7 million in stock. Ryan Tolkin (CIO)’s fund, Schonfeld Strategic Advisors, also cut its stock, about $5.4 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 2 funds in the third quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Euronet Worldwide, Inc. (NASDAQ:EEFT) but similarly valued. These stocks are ADT Inc. (NYSE:ADT), Marriott Vacations Worldwide Corporation (NYSE:VAC), Axalta Coating Systems Ltd (NYSE:AXTA), Celsius Holdings, Inc. (NASDAQ:CELH), Kornit Digital Ltd. (NASDAQ:KRNT), Sportradar Group AG (NASDAQ:SRAD), and Fiverr International Ltd. (NYSE:FVRR). This group of stocks’ market values resemble EEFT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ADT | 18 | 335536 | -3 |
| VAC | 23 | 751056 | -12 |
| AXTA | 37 | 1048946 | -10 |
| CELH | 22 | 220511 | 2 |
| KRNT | 22 | 287826 | 1 |
| SRAD | 30 | 158145 | 30 |
| FVRR | 29 | 520429 | -1 |
| Average | 25.9 | 474636 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.9 hedge funds with bullish positions and the average amount invested in these stocks was $475 million. That figure was $380 million in EEFT’s case. Axalta Coating Systems Ltd (NYSE:AXTA) is the most popular stock in this table. On the other hand ADT Inc. (NYSE:ADT) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Euronet Worldwide, Inc. (NASDAQ:EEFT) is more popular among hedge funds. Our overall hedge fund sentiment score for EEFT is 77.3. 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. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately EEFT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on EEFT were disappointed as the stock returned -20.4% since the end of the third quarter (through 11/30) 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 since 2019.
Follow Euronet Worldwide Inc. (NASDAQ:EEFT)
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Disclosure: None. This article was originally published at Insider Monkey.
