If you are looking for the best ideas for your portfolio you may want to consider some of Artko Capital’s top stock picks. Artko Capital, an investment management firm, is bullish on USA Technologies Inc (NYSE:USAT) stock. In its Q2 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on USA Technologies Inc (NYSE:USAT) stock. USA Technologies Inc (NYSE:USAT) is a payment technology provider of cashless and mobile transactions in the unattended and self-serve retail markets.
On July 22, 2019, Artko Capital had released its Q2 2019 investor letter. USA Technologies Inc (NYSE:USAT) stock has posted a return of 70.0% in the trailing one year period, outperforming the S&P 500 Index which returned 11.4% in the same period. This suggests that the investment firm was right in its decision. On a year-to-date basis, USA Technologies Inc (NYSE:USAT) stock has risen by 14.9%.
In Q2 2019 investor letter, Artko Capital said the fund posted a return of 15.1% in the second quarter of 2019, outperforming fund’s benchmark the S&P 500 Index which returned 4.3% in the same period. Let’s take a look at comments made by Artko Capital about USA Technologies Inc (NYSE:USAT) stock in the Q2 2019 investor letter.
“our sale of the USA Technologies (USAT) position from the Core Portfolio, in September 2017 was based on an assessment that despite the obvious fact that the company would be much more valuable in the hands of a larger, more experienced strategic acquirer within the payments space, the CEO’s $1mm+ annual salary, miniscule ownership of shares, and obtuse attitude toward shareholders would preclude any such transactions. Our re-investment late last year at sub $4.00 prices back in USAT via a smaller Enhanced Portfolio position was based on the assessment that while the company retained its strategic value, better board oversight, a severely weakened CEO and over $13mm in public company costs in the last nine months, significantly increased the probability of an eventual sale of the company relative to the time of our first exit. This past quarter a reputable activist investor, Hudson Executive Capital, with a history of forcing company sales reported a 12% stake in USAT which contributed to the doubling of our 4.0% position from late last year. We have taken some gains off the table as a result above $7.50 and are comfortable with the current 4.0% weighting as we expect the company’s filing of its financials by September 2019 will result in more calls for outright sale or firing of the mediocre and entrenched CEO, Stephen Herbert, an event which would lead us to consider making USAT a higher weighting in the overall portfolio. While we certainly do not expect every transaction that we consider as part of our thesis to happen, we believe assessing the likelihood of them happening as a core part of our research process has served our partnership well and we are excited to report that a significant part of this past quarter’s outperformance was as a result of these assessments.”
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Video: Top 5 Stocks Among Hedge Funds
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