Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Everi Holdings Inc (NYSE:EVRI).
Everi Holdings Inc (NYSE:EVRI) has experienced a decrease in hedge fund interest in recent months. Everi Holdings Inc (NYSE:EVRI) was in 24 hedge funds’ portfolios at the end of March. The all time high for this statistic is 30. Our calculations also showed that EVRI 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, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. 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 check out the latest hedge fund action encompassing Everi Holdings Inc (NYSE:EVRI).
Do Hedge Funds Think EVRI Is A Good Stock To Buy Now?
At first quarter’s end, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -17% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards EVRI over the last 23 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Everi Holdings Inc (NYSE:EVRI) was held by Indaba Capital Management, which reported holding $30.2 million worth of stock at the end of December. It was followed by Driehaus Capital with a $22.7 million position. Other investors bullish on the company included Two Sigma Advisors, Millennium Management, and Private Capital Management. In terms of the portfolio weights assigned to each position Cumberland Associates / Springowl Associates allocated the biggest weight to Everi Holdings Inc (NYSE:EVRI), around 5.5% of its 13F portfolio. DG Capital Management is also relatively very bullish on the stock, setting aside 3.9 percent of its 13F equity portfolio to EVRI.
Because Everi Holdings Inc (NYSE:EVRI) has faced falling interest from the smart money, we can see that there were a few money managers that slashed their entire stakes in the first quarter. Intriguingly, Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management cut the biggest position of all the hedgies followed by Insider Monkey, valued at about $18.8 million in stock. Gregg Moskowitz’s fund, Interval Partners, also cut its stock, about $16.5 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 5 funds in the first quarter.
Let’s now review hedge fund activity in other stocks similar to Everi Holdings Inc (NYSE:EVRI). We will take a look at Northwest Biotherapeutics, Inc (NASDAQ:NWBO), German American Bancorp., Inc. (NASDAQ:GABC), Employers Holdings, Inc. (NYSE:EIG), Shattuck Labs, Inc. (NASDAQ:STTK), Cambium Networks Corporation (NASDAQ:CMBM), National Bank Holdings Corp (NYSE:NBHC), and Alexander & Baldwin Inc (NYSE:ALEX). All of these stocks’ market caps are closest to EVRI’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.7 hedge funds with bullish positions and the average amount invested in these stocks was $80 million. That figure was $217 million in EVRI’s case. Alexander & Baldwin Inc (NYSE:ALEX) is the most popular stock in this table. On the other hand Northwest Biotherapeutics, Inc (NASDAQ:NWBO) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Everi Holdings Inc (NYSE:EVRI) is more popular among hedge funds. Our overall hedge fund sentiment score for EVRI is 74. 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 returned 23.8% in 2021 through July 16th but still managed to beat the market by 7.7 percentage points. Hedge funds were also right about betting on EVRI as the stock returned 50.3% since the end of March (through 7/16) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Follow Everi Holdings Inc. (NYSE:EVRI)
Follow Everi Holdings Inc. (NYSE:EVRI)
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Disclosure: None. This article was originally published at Insider Monkey.