What’s Driving PAR Technology (PAR) Stock To New Highs?

If you are looking for the best ideas for your portfolio you may want to consider some of Greenhaven Road Capital‘s top stock picks. Greenhaven Road Capital, an investment management firm, is bullish on PAR Technology Corp (NYSE:PAR) stock. In its Q2 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on PAR Technology Corp (NYSE:PAR) stock. PAR Technology Corp (NYSE:PAR) is a provider of systems and service solutions for the hospitality industry.

On August 1, 2019, Greenhaven Road Capital had released its Q2 2019 investor letter. PAR Technology Corp (NYSE:PAR) was one of the Top 5 holdings of Greenhaven in Q2 2019. The stock has posted a return of 65.0% in the trailing one year period, outperforming the S&P 500 Index which returned 20.0% in the same period. This suggests that the investment firm was right in its decision. On a year-to-date basis, PAR Technology Corp (NYSE:PAR) stock has risen by 21.5%.

Last month, we published an article revealing Greenhaven’s bullish investment thesis on PAR Technology Corp (NYSE:PAR) stock in its Q2 2020 investor letter. This suggests that the investment firm has been bullish for a long time on PAR Technology.

Greenhaven’s fund posted a return of -4.0% in the second quarter of 2019, underperforming the S&P 500 Index which returned 4.3% in the same quarter. Let’s take a look at comments made by Greenhaven Road Capital about PAR Technology Corp (NYSE:PAR) in the Q2 2019 investor letter.

“PAR Technology (PAR) – Also discussed at length in the last letter, Point of Sale (POS) technology provider PAR is in the very early stages of a potential transformation. It is easy to distribute press releases and hold investor conferences portending a bright future, but actual business building takes time. In Q3, the company will begin the rollout of a payments solution that has the potential to bring incremental revenue from existing and future software customers. Many POS software providers make more on payments than on the actual software. PAR may never reach this end-state since many of their larger customers may stay with their current providers, but a viable payments offering will be a major step forward.

PAR primarily sells its system, Brink, to larger restaurant chains at the corporate level and was installed in just under 8,000 locations as of the end of Q1. However, including franchisees, current customers such as Dairy Queen have more than 30,000 additional aggregate locations where PAR is approved and Brink could be installed. Given this captive pool of franchisees as well as a pipeline of new restaurant chains, there is a very plausible path to 20,000 locations at the end of next year. This expansion, coupled with likely rising prices and a credit card payment processing offering, means the economics of PAR may look very different in the not too distant future. There is of course execution risk and some optimism built into the share price, but if management comes even close to the potential, this too falls into our “it could double” bucket.”

Young woman with trendy blonde hair looking away while taking a bite from her pastry, at a table in a modern cafe with a dark grey wall

In Q1 2020, the number of bullish hedge fund positions on PAR Technology Corp (NYSE:PAR) stock decreased by about 33% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with PAR’s growth potential. Our calculations showed that PAR Technology Corp (NYSE:PAR) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out ideas like this under-the-radar stock to identify the next tenbagger. We go through lists like the 10 most profitable companies in America 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. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. You can subscribe to our free enewsletter below to receive our stories in your inbox:

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