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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 EZCORP Inc (NASDAQ:EZPW) based on that data.
Is EZPW a good stock to buy now? Hedge fund interest in EZCORP Inc (NASDAQ:EZPW) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that EZPW 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). At the end of this article we will also compare EZPW to other stocks including Surface Oncology, Inc. (NASDAQ:SURF), Clearfield, Inc. (NASDAQ:CLFD), and Independent Bank Corporation (NASDAQ:IBCP) to get a better sense of its popularity.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Ken Griffin of Citadel Investment Group
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. Keeping this in mind we're going to take a gander at the recent hedge fund action encompassing EZCORP Inc (NASDAQ:EZPW).
Do Hedge Funds Think EZPW Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 19 hedge funds with a bullish position in EZPW a year ago. With the smart money's sentiment swirling, there exists a few noteworthy hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
Among these funds, Lafitte Capital Management held the most valuable stake in EZCORP Inc (NASDAQ:EZPW), which was worth $22.5 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $13.6 million worth of shares. Archon Capital Management, Arrowstreet Capital, and Citadel Investment Group 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 Lafitte Capital Management allocated the biggest weight to EZCORP Inc (NASDAQ:EZPW), around 24.23% of its 13F portfolio. Archon Capital Management is also relatively very bullish on the stock, dishing out 1.69 percent of its 13F equity portfolio to EZPW.
Seeing as EZCORP Inc (NASDAQ:EZPW) has faced declining sentiment from the smart money, we can see that there exists a select few fund managers that decided to sell off their full holdings heading into Q4. At the top of the heap, Ken Griffin's Citadel Investment Group said goodbye to the largest position of all the hedgies tracked by Insider Monkey, valued at close to $6.2 million in stock. Joe Huber's fund, Huber Capital Management, also cut its stock, about $1.9 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's go over hedge fund activity in other stocks similar to EZCORP Inc (NASDAQ:EZPW). We will take a look at Surface Oncology, Inc. (NASDAQ:SURF), Clearfield, Inc. (NASDAQ:CLFD), Independent Bank Corporation (NASDAQ:IBCP), Xeris Pharmaceuticals, Inc. (NASDAQ:XERS), Guaranty Bancshares, Inc. (NASDAQ:GNTY), Anavex Life Sciences Corp. (NASDAQ:AVXL), and Bridgewater Bancshares, Inc. (NASDAQ:BWB). This group of stocks' market caps resemble EZPW's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SURF,13,56704,2 CLFD,3,13830,-1 IBCP,13,24898,-1 XERS,13,49164,-7 GNTY,2,3343,0 AVXL,3,3308,-2 BWB,6,19703,-3 Average,7.6,24421,-1.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.6 hedge funds with bullish positions and the average amount invested in these stocks was $24 million. That figure was $56 million in EZPW's case. Surface Oncology, Inc. (NASDAQ:SURF) is the most popular stock in this table. On the other hand Guaranty Bancshares, Inc. (NASDAQ:GNTY) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks EZCORP Inc (NASDAQ:EZPW) is more popular among hedge funds. Our overall hedge fund sentiment score for EZPW is 76.4. 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. 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 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Unfortunately EZPW wasn't nearly as popular as these 20 stocks and hedge funds that were betting on EZPW were disappointed as the stock returned -1% since the end of the third quarter (through 12/14) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.