We have been waiting for this for a year and finally the third quarter ended up showing a nice bump in the performance of small-cap stocks. Both the S&P 500 and Russell 2000 were up since the end of the second quarter, but small-cap stocks outperformed the large-cap stocks by double digits. This is important for hedge funds, which are big supporters of small-cap stocks, because their investors started pulling some of their capital out due to poor recent performance. It is very likely that equity hedge funds will deliver better risk adjusted returns in the second half of this year. In this article we are going to look at how this recent market trend affected the sentiment of hedge funds towards CPI Card Group Inc (NASDAQ:PMTS), and what that likely means for the prospects of the company and its stock.
Is CPI Card Group Inc (NASDAQ:PMTS) a cheap stock to buy now? The smart money is really buying. The number of bullish hedge fund bets that are revealed through the 13F filings inched up by 3 recently. PMTS was in 12 hedge funds’ portfolios at the end of the third quarter of 2016. There were 9 hedge funds in our database with PMTS holdings at the end of the previous quarter. At the end of this article we will also compare PMTS to other stocks including Tucows Inc. (USA) (NASDAQ:TCX), Western Ast Clymr Infl Lkd Sc & Incm Fd (NYSE:WIA), and Hometrust Bancshares Inc (NASDAQ:HTBI) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
What does the smart money think about CPI Card Group Inc (NASDAQ:PMTS)?
Heading into the fourth quarter of 2016, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a boost of 33% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in PMTS over the last 5 quarters. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Crosslink Capital, led by Seymour Sy Kaufman and Michael Stark, holds the number one position in CPI Card Group Inc (NASDAQ:PMTS). According to regulatory filings, the fund has a $4.5 million position in the stock, comprising 0.8% of its 13F portfolio. The second largest stake is held by George McCabe of Portolan Capital Management, which manages a $3.4 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions contain William Charters and Mario Marcon’s Sabal Capital Management, D E Shaw , one of the largest hedge funds in the world, and Jim Simons’ Renaissance Technologies. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.