Is Capella Education Company (NASDAQ:CPLA) ready to rally soon? Money managers are getting less optimistic. The number of bullish hedge fund positions fell by 7 recently.
In the financial world, there are dozens of metrics market participants can use to monitor their holdings. A couple of the most underrated are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best money managers can beat their index-focused peers by a significant margin (see just how much).
Equally as important, bullish insider trading activity is a second way to parse down the investments you're interested in. As the old adage goes: there are plenty of stimuli for a corporate insider to cut shares of his or her company, but just one, very obvious reason why they would behave bullishly. Various empirical studies have demonstrated the impressive potential of this tactic if "monkeys" know what to do (learn more here).
Now, let's take a look at the recent action encompassing Capella Education Company (NASDAQ:CPLA).
Heading into Q2, a total of 7 of the hedge funds we track were long in this stock, a change of -50% from the previous quarter. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes meaningfully.
Of the funds we track, Renaissance Technologies, managed by Jim Simons, holds the biggest position in Capella Education Company (NASDAQ:CPLA). Renaissance Technologies has a $26.6 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Royce & Associates, managed by Chuck Royce, which held a $8.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Cliff Asness's AQR Capital Management, Ken Griffin's Citadel Investment Group and John Overdeck and David Siegel's Two Sigma Advisors.
Due to the fact that Capella Education Company (NASDAQ:CPLA) has faced bearish sentiment from hedge fund managers, we can see that there was a specific group of hedge funds who were dropping their full holdings last quarter. It's worth mentioning that Israel Englander's Millennium Management dropped the largest position of the "upper crust" of funds we monitor, totaling an estimated $1.8 million in stock., and Peter Algert and Kevin Coldiron of Algert Coldiron Investors was right behind this move, as the fund dumped about $1.2 million worth. These moves are important to note, as total hedge fund interest fell by 7 funds last quarter.
Insider purchases made by high-level executives is particularly usable when the company we're looking at has seen transactions within the past six months. Over the last 180-day time frame, Capella Education Company (NASDAQ:CPLA) has experienced zero unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
Let's check out hedge fund and insider activity in other stocks similar to Capella Education Company (NASDAQ:CPLA). These stocks are Strayer Education Inc (NASDAQ:STRA), Universal Technical Institute, Inc. (NYSE:UTI), ITT Educational Services, Inc. (NYSE:ESI), Education Management Corp (NASDAQ:EDMC), and GP Strategies Corporation (NYSE:GPX). This group of stocks belong to the education & training services industry and their market caps are similar to CPLA's market cap.