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Hedge Funds Are Dumping Meta Financial Group Inc. (CASH)

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Debasis Saha
·6 min read
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Is Meta Financial Group Inc. (NASDAQ:CASH) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

Meta Financial Group Inc. (NASDAQ:CASH) was in 6 hedge funds' portfolios at the end of September. The all time high for this statistics is 18. CASH shareholders have witnessed a decrease in enthusiasm from smart money in recent months. There were 16 hedge funds in our database with CASH holdings at the end of June. Our calculations also showed that CASH 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.

In the 21st century investor’s toolkit there are a large number of methods stock market investors have at their disposal to appraise publicly traded companies. A duo of the most innovative methods are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the best picks of the best hedge fund managers can beat the S&P 500 by a superb amount (see the details here).

Peter Rathjens Arrowstreet Capital 394
Peter Rathjens Arrowstreet Capital 394

Peter Rathjens of Arrowstreet Capital

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. With all of this in mind we're going to go over the fresh hedge fund action regarding Meta Financial Group Inc. (NASDAQ:CASH).

What does smart money think about Meta Financial Group Inc. (NASDAQ:CASH)?

Heading into the fourth quarter of 2020, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -63% from the second quarter of 2020. By comparison, 15 hedge funds held shares or bullish call options in CASH a year ago. With hedgies' sentiment swirling, there exists a few key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

Is CASH A Good Stock To Buy?
Is CASH A Good Stock To Buy?

When looking at the institutional investors followed by Insider Monkey, Wilmot B. Harkey and Daniel Mack's Nantahala Capital Management has the most valuable position in Meta Financial Group Inc. (NASDAQ:CASH), worth close to $34.6 million, corresponding to 1.1% of its total 13F portfolio. Sitting at the No. 2 spot is John Osterweis of Osterweis Capital Management, with a $4.9 million position; 0.3% of its 13F portfolio is allocated to the company. Other peers with similar optimism include Ken Griffin's Citadel Investment Group, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital and John Overdeck and David Siegel's Two Sigma Advisors. In terms of the portfolio weights assigned to each position Nantahala Capital Management allocated the biggest weight to Meta Financial Group Inc. (NASDAQ:CASH), around 1.06% of its 13F portfolio. Osterweis Capital Management is also relatively very bullish on the stock, setting aside 0.33 percent of its 13F equity portfolio to CASH.

Since Meta Financial Group Inc. (NASDAQ:CASH) has faced declining sentiment from the smart money, it's easy to see that there lies a certain "tier" of hedge funds that slashed their full holdings heading into Q4. Intriguingly, Israel Englander's Millennium Management dropped the biggest position of the "upper crust" of funds monitored by Insider Monkey, comprising close to $0.7 million in stock, and Mika Toikka's AlphaCrest Capital Management was right behind this move, as the fund dumped about $0.6 million worth. These transactions are important to note, as total hedge fund interest was cut by 10 funds heading into Q4.

Let's go over hedge fund activity in other stocks similar to Meta Financial Group Inc. (NASDAQ:CASH). These stocks are Conduent Incorporated (NYSE:CNDT), National Western Life Group Inc. (NASDAQ:NWLI), GameStop Corp. (NYSE:GME), AAR Corp. (NYSE:AIR), SunOpta, Inc. (NASDAQ:STKL), Star Bulk Carriers Corp. (NASDAQ:SBLK), and Noble Midstream Partners LP (NYSE:NBLX). All of these stocks' market caps are similar to CASH's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CNDT,16,185777,-5 NWLI,7,10294,0 GME,28,164392,9 AIR,18,43968,-1 STKL,13,253119,0 SBLK,5,303910,-2 NBLX,1,1820,0 Average,12.6,137611,0.1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.6 hedge funds with bullish positions and the average amount invested in these stocks was $138 million. That figure was $42 million in CASH's case. GameStop Corp. (NYSE:GME) is the most popular stock in this table. On the other hand Noble Midstream Partners LP (NYSE:NBLX) is the least popular one with only 1 bullish hedge fund positions. Meta Financial Group Inc. (NASDAQ:CASH) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CASH is 14.3. 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 November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on CASH as the stock returned 81.7% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.

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

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