With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was International Money Express, Inc. (NASDAQ:IMXI).
Is IMXI a good stock to buy now? The best stock pickers were getting more optimistic. The number of long hedge fund bets inched up by 4 in recent months. International Money Express, Inc. (NASDAQ:IMXI) was in 17 hedge funds’ portfolios at the end of September. The all time high for this statistic is 14. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that IMXI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 13 hedge funds in our database with IMXI positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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. Keeping this in mind we’re going to take a glance at the fresh hedge fund action encompassing International Money Express, Inc. (NASDAQ:IMXI).
Do Hedge Funds Think IMXI Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 31% from the previous quarter. By comparison, 14 hedge funds held shares or bullish call options in IMXI a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in International Money Express, Inc. (NASDAQ:IMXI) was held by Steamboat Capital Partners, which reported holding $38.5 million worth of stock at the end of September. It was followed by Nantahala Capital Management with a $33.3 million position. Other investors bullish on the company included Headlands Capital, Royce & Associates, and Winton Capital Management. In terms of the portfolio weights assigned to each position Headlands Capital allocated the biggest weight to International Money Express, Inc. (NASDAQ:IMXI), around 24.31% of its 13F portfolio. Steamboat Capital Partners is also relatively very bullish on the stock, setting aside 6.27 percent of its 13F equity portfolio to IMXI.
Consequently, key money managers were leading the bulls’ herd. Engineers Gate Manager, managed by Greg Eisner, assembled the most valuable position in International Money Express, Inc. (NASDAQ:IMXI). Engineers Gate Manager had $0.9 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $0.6 million investment in the stock during the quarter. The other funds with brand new IMXI positions are Michael Gelband’s ExodusPoint Capital, Cliff Asness’s AQR Capital Management, and John Overdeck and David Siegel’s Two Sigma Advisors.
Let’s now review hedge fund activity in other stocks similar to International Money Express, Inc. (NASDAQ:IMXI). These stocks are Molecular Templates, Inc. (NASDAQ:MTEM), Endeavour Silver Corp. (NYSE:EXK), Harmonic Inc (NASDAQ:HLIT), Oyster Point Pharma, Inc. (NASDAQ:OYST), Forte Biosciences, Inc. (NASDAQ:FBRX), Cars.com LLC (NYSE:CARS), and MSG Networks Inc (NYSE:MSGN). This group of stocks’ market values resemble IMXI’s market value.
|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 16 hedge funds with bullish positions and the average amount invested in these stocks was $88 million. That figure was $110 million in IMXI’s case. MSG Networks Inc (NYSE:MSGN) is the most popular stock in this table. On the other hand Forte Biosciences, Inc. (NASDAQ:FBRX) is the least popular one with only 6 bullish hedge fund positions. International Money Express, Inc. (NASDAQ:IMXI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for IMXI is 66.5. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on IMXI as the stock returned 15.7% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.