Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the first quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Net 1 UEPS Technologies Inc (NASDAQ:UEPS) based on that data.
Net 1 UEPS Technologies Inc (NASDAQ:UEPS) was in 16 hedge funds' portfolios at the end of March. UEPS investors should pay attention to an increase in support from the world's most elite money managers recently. There were 15 hedge funds in our database with UEPS holdings at the end of the previous quarter. Our calculations also showed that UEPS isn't among the 30 most popular stocks among hedge funds (click for Q1 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 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 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 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.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, blockchain technology's influence will go beyond online payments. So, we are checking out this futurist's moonshot opportunities in tech stocks. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we're going to take a look at the latest hedge fund action surrounding Net 1 UEPS Technologies Inc (NASDAQ:UEPS).
What have hedge funds been doing with Net 1 UEPS Technologies Inc (NASDAQ:UEPS)?
At Q1's end, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 7% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards UEPS over the last 18 quarters. With the smart money's capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
The largest stake in Net 1 UEPS Technologies Inc (NASDAQ:UEPS) was held by International Value Advisers, which reported holding $18.8 million worth of stock at the end of September. It was followed by Prescott Group Capital Management with a $10.8 million position. Other investors bullish on the company included Rubric Capital Management, Newtyn Management, and D E Shaw. In terms of the portfolio weights assigned to each position Prescott Group Capital Management allocated the biggest weight to Net 1 UEPS Technologies Inc (NASDAQ:UEPS), around 5.35% of its 13F portfolio. Rubric Capital Management is also relatively very bullish on the stock, earmarking 1.34 percent of its 13F equity portfolio to UEPS.
Now, some big names were breaking ground themselves. Millennium Management, managed by Israel Englander, created the biggest position in Net 1 UEPS Technologies Inc (NASDAQ:UEPS). Millennium Management had $0.2 million invested in the company at the end of the quarter. Nick Thakore's Diametric Capital also initiated a $0.1 million position during the quarter. The only other fund with a new position in the stock is Gavin Saitowitz and Cisco J. del Valle's Springbok Capital.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Net 1 UEPS Technologies Inc (NASDAQ:UEPS) but similarly valued. We will take a look at Modine Manufacturing Company (NYSE:MOD), Saga Communications, Inc. (NASDAQ:SGA), Plymouth Industrial REIT, Inc. (NYSE:PLYM), and CECO Environmental Corp. (NASDAQ:CECE). This group of stocks' market values match UEPS's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MOD,16,20428,-1 SGA,3,15949,0 PLYM,9,15292,0 CECE,7,29575,-2 Average,8.75,20311,-0.75 [/table]
As you can see these stocks had an average of 8.75 hedge funds with bullish positions and the average amount invested in these stocks was $20 million. That figure was $49 million in UEPS's case. Modine Manufacturing Company (NYSE:MOD) is the most popular stock in this table. On the other hand Saga Communications, Inc. (NASDAQ:SGA) is the least popular one with only 3 bullish hedge fund positions. Net 1 UEPS Technologies Inc (NASDAQ:UEPS) is not the most popular stock in this group but hedge fund interest is still above average. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.3% in 2020 through June 25th but beat the market by 16.8 percentage points. Unfortunately UEPS wasn't nearly as popular as these 10 stocks and hedge funds that were betting on UEPS were disappointed as the stock returned 7.6% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
