Is EVRI Stock A Buy or Sell?

We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Melvin Capital’s recent GameStop losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Everi Holdings Inc (NYSE:EVRI).

Is EVRI stock a buy? Everi Holdings Inc (NYSE:EVRI) was in 29 hedge funds’ portfolios at the end of December. The all time high for this statistic is 30. EVRI shareholders have witnessed an increase in support from the world’s most elite money managers recently. There were 26 hedge funds in our database with EVRI positions at the end of the third quarter. Our calculations also showed that EVRI isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 124 percentage points since March 2017 (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 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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 website. Now let’s take a look at the new hedge fund action surrounding Everi Holdings Inc (NYSE:EVRI).

Do Hedge Funds Think EVRI Is A Good Stock To Buy Now?

At fourth quarter’s end, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 12% from the third quarter of 2020. On the other hand, there were a total of 30 hedge funds with a bullish position in EVRI 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.

The largest stake in Everi Holdings Inc (NYSE:EVRI) was held by Millennium Management, which reported holding $32.9 million worth of stock at the end of December. It was followed by Indaba Capital Management with a $30.7 million position. Other investors bullish on the company included Two Sigma Advisors, Private Capital Management, and Nantahala Capital Management. In terms of the portfolio weights assigned to each position DG Capital Management allocated the biggest weight to Everi Holdings Inc (NYSE:EVRI), around 6.38% of its 13F portfolio. Cumberland Associates / Springowl Associates is also relatively very bullish on the stock, designating 5.75 percent of its 13F equity portfolio to EVRI.

Now, specific money managers were breaking ground themselves. Driehaus Capital, managed by Richard Driehaus, created the most valuable position in Everi Holdings Inc (NYSE:EVRI). Driehaus Capital had $17.7 million invested in the company at the end of the quarter. Gregg Moskowitz’s Interval Partners also made a $16.5 million investment in the stock during the quarter. The other funds with new positions in the stock are J. Carlo Cannell’s Cannell Capital, Steven Ng and Andrew Mitchell’s Ophir Asset Management, and Anthony Joseph Vaccarino’s North Fourth Asset Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Everi Holdings Inc (NYSE:EVRI) but similarly valued. We will take a look at Raven Industries, Inc. (NASDAQ:RAVN), So-Young International Inc. (NASDAQ:SY), iTeos Therapeutics, Inc. (NASDAQ:ITOS), Delek US Holdings, Inc. (NYSE:DK), Krystal Biotech, Inc. (NASDAQ:KRYS), Core Laboratories N.V. (NYSE:CLB), and Getty Realty Corp. (NYSE:GTY). All of these stocks’ market caps are similar to EVRI’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.9 hedge funds with bullish positions and the average amount invested in these stocks was $163 million. That figure was $281 million in EVRI’s case. Delek US Holdings, Inc. (NYSE:DK) is the most popular stock in this table. On the other hand So-Young International Inc. (NASDAQ:SY) is the least popular one with only 8 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 87. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.2% in 2021 through April 12th and still beat the market by 1.5 percentage points. Unfortunately EVRI wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on EVRI were disappointed as the stock returned 3.3% since the end of the fourth quarter (through 4/12) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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