Paysign, Inc. (PAYS): Hedge Funds In Wait-and-See Mode

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 817 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2020. In this article we are going to take a look at smart money sentiment towards Paysign, Inc. (NASDAQ:PAYS).

Hedge fund interest in Paysign, Inc. (NASDAQ:PAYS) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that PAYS 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). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as TravelCenters of America Inc. (NASDAQ:TA), Microvision, Inc. (NASDAQ:MVIS), and Citizens, Inc. (NYSE:CIA) to gather more data points.

Video: Watch our video about the top 5 most popular hedge fund stocks.

In the financial world there are a large number of gauges shareholders put to use to grade their holdings. A duo of the less utilized gauges are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the top picks of the best hedge fund managers can trounce the market by a superb amount (see the details here).

Peter Algert of Algert Global

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. Now we’re going to check out the latest hedge fund action encompassing Paysign, Inc. (NASDAQ:PAYS).

What does smart money think about Paysign, Inc. (NASDAQ:PAYS)?

Heading into the fourth quarter of 2020, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in PAYS over the last 21 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Renaissance Technologies held the most valuable stake in Paysign, Inc. (NASDAQ:PAYS), which was worth $9 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $0.5 million worth of shares. Citadel Investment Group, Tudor Investment Corp, and Algert Global 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 Algert Global allocated the biggest weight to Paysign, Inc. (NASDAQ:PAYS), around 0.04% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, earmarking 0.01 percent of its 13F equity portfolio to PAYS.

Since Paysign, Inc. (NASDAQ:PAYS) has faced a decline in interest from the entirety of the hedge funds we track, it’s safe to say that there were a few hedgies that elected to cut their positions entirely in the third quarter. Intriguingly, D. E. Shaw’s D E Shaw said goodbye to the largest position of the 750 funds monitored by Insider Monkey, totaling an estimated $1.7 million in stock, and John Overdeck and David Siegel’s Two Sigma Advisors was right behind this move, as the fund dropped about $0.4 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Paysign, Inc. (NASDAQ:PAYS) but similarly valued. We will take a look at TravelCenters of America Inc. (NASDAQ:TA), Microvision, Inc. (NASDAQ:MVIS), Citizens, Inc. (NYSE:CIA), Oppenheimer Holdings Inc. (NYSE:OPY), Powell Industries, Inc. (NASDAQ:POWL), Jounce Therapeutics, Inc. (NASDAQ:JNCE), and Mesabi Trust (NYSE:MSB). This group of stocks’ market values are closest to PAYS’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TA 12 62213 5
MVIS 2 237 0
CIA 2 2160 0
OPY 10 20369 2
POWL 13 27224 0
JNCE 12 14074 0
MSB 5 37474 0
Average 8 23393 1

View table here if you experience formatting issues.

As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $23 million. That figure was $10 million in PAYS’s case. Powell Industries, Inc. (NASDAQ:POWL) is the most popular stock in this table. On the other hand Microvision, Inc. (NASDAQ:MVIS) is the least popular one with only 2 bullish hedge fund positions. Paysign, Inc. (NASDAQ:PAYS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PAYS is 28.6. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 November 27th and surpassed the market again by 16.1 percentage points. Unfortunately PAYS wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); PAYS investors were disappointed as the stock returned -11.6% since the end of September (through 11/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

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