Is EEFT Stock A Buy or Sell?
We at Insider Monkey have gone over 887 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 December 31st. In this article, we look at what those funds think of Euronet Worldwide, Inc. (NASDAQ:EEFT) based on that data.
Is EEFT stock a buy? Euronet Worldwide, Inc. (NASDAQ:EEFT) was in 32 hedge funds' portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 47. EEFT investors should pay attention to a decrease in activity from the world's largest hedge funds recently. There were 39 hedge funds in our database with EEFT holdings at the end of September. Our calculations also showed that EEFT isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).
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Do Hedge Funds Think EEFT Is A Good Stock To Buy Now?
At the end of December, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -18% from the previous quarter. On the other hand, there were a total of 47 hedge funds with a bullish position in EEFT a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
More specifically, Dorsal Capital Management was the largest shareholder of Euronet Worldwide, Inc. (NASDAQ:EEFT), with a stake worth $155.4 million reported as of the end of December. Trailing Dorsal Capital Management was Joho Capital, which amassed a stake valued at $66.4 million. Arrowstreet Capital, Citadel Investment Group, and Cardinal Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Joho Capital allocated the biggest weight to Euronet Worldwide, Inc. (NASDAQ:EEFT), around 11.34% of its 13F portfolio. Dorsal Capital Management is also relatively very bullish on the stock, designating 8.99 percent of its 13F equity portfolio to EEFT.
Judging by the fact that Euronet Worldwide, Inc. (NASDAQ:EEFT) has experienced declining sentiment from hedge fund managers, we can see that there were a few funds that decided to sell off their entire stakes in the fourth quarter. At the top of the heap, Michael Rockefeller and Karl Kroeker's Woodline Partners cut the biggest investment of the "upper crust" of funds tracked by Insider Monkey, valued at close to $15.8 million in stock. Ryan Caldwell's fund, Chiron Investment Management, also cut its stock, about $12.8 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 7 funds in the fourth quarter.
Let's also examine hedge fund activity in other stocks similar to Euronet Worldwide, Inc. (NASDAQ:EEFT). We will take a look at Quidel Corporation (NASDAQ:QDEL), The Gap Inc. (NYSE:GPS), Gerdau SA (NYSE:GGB), Hyatt Hotels Corporation (NYSE:H), AECOM (NYSE:ACM), Berry Global Group Inc (NYSE:BERY), and Nielsen Holdings plc (NYSE:NLSN). This group of stocks' market values are similar to EEFT's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position QDEL,29,401017,-13 GPS,38,754622,3 GGB,15,196789,4 H,27,757056,1 ACM,37,774116,-2 BERY,34,1289609,-9 NLSN,34,1627449,4 Average,30.6,828665,-1.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.6 hedge funds with bullish positions and the average amount invested in these stocks was $829 million. That figure was $489 million in EEFT's case. The Gap Inc. (NYSE:GPS) is the most popular stock in this table. On the other hand Gerdau SA (NYSE:GGB) is the least popular one with only 15 bullish hedge fund positions. Euronet Worldwide, Inc. (NASDAQ:EEFT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for EEFT is 55.4. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.2% in 2021 through April 12th and beat the market again by 1.5 percentage points. Unfortunately EEFT wasn't nearly as popular as these 30 stocks and hedge funds that were betting on EEFT were disappointed as the stock returned 2.7% since the end of December (through 4/12) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
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