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 Evertec Inc (NYSE:EVTC).
Evertec Inc (NYSE:EVTC) was in 21 hedge funds’ portfolios at the end of March. The all time high for this statistic is 26. EVTC has experienced a decrease in activity from the world’s largest hedge funds of late. There were 22 hedge funds in our database with EVTC positions at the end of the fourth quarter. Our calculations also showed that EVTC isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was 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). So you can still find a lot of gems by following hedge funds’ moves today.
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 take a gander at the fresh hedge fund action surrounding Evertec Inc (NYSE:EVTC).
Do Hedge Funds Think EVTC Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of -5% from the fourth quarter of 2020. By comparison, 19 hedge funds held shares or bullish call options in EVTC a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Rivulet Capital was the largest shareholder of Evertec Inc (NYSE:EVTC), with a stake worth $70.3 million reported as of the end of March. Trailing Rivulet Capital was Renaissance Technologies, which amassed a stake valued at $58.3 million. Arrowstreet Capital, Royce & Associates, and GLG Partners 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 Rivulet Capital allocated the biggest weight to Evertec Inc (NYSE:EVTC), around 3.81% of its 13F portfolio. Mendon Capital Advisors is also relatively very bullish on the stock, dishing out 1.03 percent of its 13F equity portfolio to EVTC.
Due to the fact that Evertec Inc (NYSE:EVTC) has faced falling interest from hedge fund managers, it’s safe to say that there were a few hedgies who sold off their positions entirely by the end of the first quarter. At the top of the heap, Valerie Malter’s Matarin Capital dropped the biggest investment of all the hedgies tracked by Insider Monkey, valued at close to $4.2 million in stock, and Qing Li’s Sciencast Management was right behind this move, as the fund sold off about $0.7 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 1 funds by the end of the first quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Evertec Inc (NYSE:EVTC). We will take a look at The Cheesecake Factory Incorporated (NASDAQ:CAKE), Range Resources Corp. (NYSE:RRC), Allegheny Technologies Incorporated (NYSE:ATI), SPX FLOW, Inc. (NASDAQ:FLOW), Broadstone Net Lease, Inc. (NYSE:BNL), Main Street Capital Corporation (NYSE:MAIN), and Sunoco LP (NYSE:SUN). This group of stocks’ market caps resemble EVTC’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 14.4 hedge funds with bullish positions and the average amount invested in these stocks was $163 million. That figure was $217 million in EVTC’s case. Range Resources Corp. (NYSE:RRC) is the most popular stock in this table. On the other hand Sunoco LP (NYSE:SUN) is the least popular one with only 2 bullish hedge fund positions. Evertec Inc (NYSE:EVTC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for EVTC is 67.8. 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 23.8% in 2021 through July 16th and still beat the market by 7.7 percentage points. Hedge funds were also right about betting on EVTC, though not to the same extent, as the stock returned 15.2% since Q1 (through July 16th) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.