What Smart Money Thinks about EZCORP Inc (EZPW)?

Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.

In this article, we will take a closer look at EZCORP Inc (NASDAQ:EZPW) and the hedge fund sentiment towards it. Overall, it looks like prominent investors are taking a bearish view. During the third quarter, the number of funds from our database long EZCORP fell by four to 16. 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 Overstock.com, Inc. (NASDAQ:OSTK), Sangamo Biosciences, Inc. (NASDAQ:SGMO), and Village Super Market, Inc. (NASDAQ:VLGEA) to gather more data points.

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.

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Keeping this in mind, let’s check out the latest action regarding EZCORP Inc (NASDAQ:EZPW).

What does the smart money think about EZCORP Inc (NASDAQ:EZPW)?

At the end of the third quarter, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on EZCORP Inc (NASDAQ:EZPW), down by 20% from the previous quarter. By comparison, 18 hedge funds held shares or bullish call options in EZPW heading into 2016. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Bryant Regan’s Lafitte Capital Management has the largest position in EZCORP Inc (NASDAQ:EZPW), worth close to $36.1 million, corresponding to 20.6% of its total 13F portfolio. On Lafitte Capital Management’s heels is Joe Huber’s Huber Capital Management, with a $28.8 million position; 1.1% of its 13F portfolio is allocated to the company. Remaining professional money managers that hold long positions encompass Marc Lisker, Glenn Fuhrman and John Phelan’s MSDC Management, Jim Simons’s Renaissance Technologies, and Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management. We should note that Nantahala Capital Management is 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.

We already know that not all hedge funds are bullish on the stock and some hedge funds actually said goodbye to their positions entirely. Intriguingly, Peter S. Park’s Park West Asset Management said goodbye to the biggest investment of the “upper crust” of funds monitored by Insider Monkey, worth close to $6.2 million in stock, and First Eagle Investment Management was right behind this move, as the fund dumped about $2.7 million worth of shares.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as EZCORP Inc (NASDAQ:EZPW) but similarly valued. These stocks are Overstock.com, Inc. (NASDAQ:OSTK), Sangamo Biosciences, Inc. (NASDAQ:SGMO), Village Super Market, Inc. (NASDAQ:VLGEA), and AG Mortgage Investment Trust Inc (NYSE:MITT). This group of stocks’ market values resemble EZPW’s market value.

As you can see these stocks had an average of 10 funds with bullish positions and the average amount invested in these stocks was $53 million. That figure was $110 million in EZPW’s case. Sangamo Biosciences, Inc. (NASDAQ:SGMO) is the most popular stock in this table with 17 funds holding long pozitions. On the other hand Village Super Market, Inc. (NASDAQ:VLGEA) is the least popular one with only 5 bullish hedge fund positions. EZCORP Inc (NASDAQ:EZPW) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Sangamo Biosciences, Inc. (NASDAQ:SGMO) might be a better candidate to consider taking a long position in.