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We at Insider Monkey have gone over 817 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of September 30th. In this article, we look at what those funds think of Ebix Inc (NASDAQ:EBIX) based on that data.
Is EBIX a good stock to buy now? Ebix Inc (NASDAQ:EBIX) has experienced a decrease in hedge fund interest in recent months. Ebix Inc (NASDAQ:EBIX) was in 13 hedge funds' portfolios at the end of September. The all time high for this statistic is 22. There were 17 hedge funds in our database with EBIX holdings at the end of June. Our calculations also showed that EBIX 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Today there are tons of metrics investors have at their disposal to value their holdings. A couple of the less known metrics are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the best picks of the elite fund managers can outperform the S&P 500 by a significant amount (see the details here).
Adam Usdan of Trellus Management
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 take a gander at the key hedge fund action encompassing Ebix Inc (NASDAQ:EBIX).
Do Hedge Funds Think EBIX Is A Good Stock To Buy Now?
At the end of September, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -24% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in EBIX over the last 21 quarters. With the smart money's positions undergoing their usual ebb and flow, there exists an "upper tier" of noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
The largest stake in Ebix Inc (NASDAQ:EBIX) was held by P2 Capital Partners, which reported holding $25.8 million worth of stock at the end of September. It was followed by Royce & Associates with a $8.2 million position. Other investors bullish on the company included Arrowstreet Capital, Trellus Management Company, and Two Sigma Advisors. In terms of the portfolio weights assigned to each position Trellus Management Company allocated the biggest weight to Ebix Inc (NASDAQ:EBIX), around 2.13% of its 13F portfolio. P2 Capital Partners is also relatively very bullish on the stock, earmarking 2.02 percent of its 13F equity portfolio to EBIX.
Due to the fact that Ebix Inc (NASDAQ:EBIX) has experienced bearish sentiment from hedge fund managers, it's safe to say that there was a specific group of hedge funds who were dropping their full holdings last quarter. It's worth mentioning that Paul Marshall and Ian Wace's Marshall Wace LLP dropped the biggest investment of all the hedgies tracked by Insider Monkey, valued at about $2.7 million in stock, and Wilmot B. Harkey and Daniel Mack's Nantahala Capital Management was right behind this move, as the fund dropped about $1.5 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 4 funds last quarter.
Let's now review hedge fund activity in other stocks similar to Ebix Inc (NASDAQ:EBIX). We will take a look at Lumber Liquidators Holdings Inc (NYSE:LL), G-III Apparel Group, Ltd. (NASDAQ:GIII), Albireo Pharma, Inc. (NASDAQ:ALBO), Transportadora de Gas del Sur SA (NYSE:TGS), Wabash National Corporation (NYSE:WNC), The Andersons, Inc. (NASDAQ:ANDE), and Colony Credit Real Estate, Inc. (NYSE:CLNC). This group of stocks' market values resemble EBIX's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LL,14,61499,5 GIII,16,45316,6 ALBO,22,220205,10 TGS,6,9871,1 WNC,18,58904,3 ANDE,15,25045,4 CLNC,10,37346,4 Average,14.4,65455,4.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.4 hedge funds with bullish positions and the average amount invested in these stocks was $65 million. That figure was $51 million in EBIX's case. Albireo Pharma, Inc. (NASDAQ:ALBO) is the most popular stock in this table. On the other hand Transportadora de Gas del Sur SA (NYSE:TGS) is the least popular one with only 6 bullish hedge fund positions. Ebix Inc (NASDAQ:EBIX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for EBIX is 40.6. 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. 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 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on EBIX as the stock returned 72.3% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.