Hedge Funds Are Betting On Cambium Learning Group, Inc. (ABCD)

Hedge funds are not perfect. They have their bad picks just like everyone else. Micron, a stock hedge funds have loved, lost 50% during the last 12 months ending in October 30. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% in the same time period, vs. a gain of 5.2% for the S&P 500 Index. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of Cambium Learning Group, Inc. (NASDAQ:ABCD).

Cambium Learning Group, Inc. (NASDAQ:ABCD) has seen an increase in support from the world’s most elite money managers lately. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as West Marine, Inc. (NASDAQ:WMAR), CECO Environmental Corp. (NASDAQ:CECE), and LeMaitre Vascular Inc (NASDAQ:LMAT) to gather more data points.

To most market participants, hedge funds are perceived as worthless, old financial tools of the past. While there are greater than an 8000 funds trading today, Our researchers look at the upper echelon of this club, around 700 funds. It is estimated that this group of investors orchestrate the lion’s share of all hedge funds’ total capital, and by tracking their unrivaled equity investments, Insider Monkey has come up with a number of investment strategies that have historically exceeded the market. Insider Monkey’s small-cap hedge fund strategy outstripped the S&P 500 index by 12 percentage points per year for a decade in their back tests.

With all of this in mind, we’re going to take a peek at the key action regarding Cambium Learning Group, Inc. (NASDAQ:ABCD).

What does the smart money think about Cambium Learning Group, Inc. (NASDAQ:ABCD)?

At the end of the third quarter, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from the second quarter. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Renaissance Technologies, managed by Jim Simons, holds the biggest position in Cambium Learning Group, Inc. (NASDAQ:ABCD). Renaissance Technologies has a $3.6 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Mario Gabelli of GAMCO Investors, with a $0.9 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors with similar optimism include Ken Griffin’s Citadel Investment Group and Israel Englander’s Millennium Management.

Consequently, specific money managers have jumped into Cambium Learning Group, Inc. (NASDAQ:ABCD) headfirst. Citadel Investment Group created the biggest position in Cambium Learning Group, Inc. (NASDAQ:ABCD). Citadel Investment Group had $0.1 million invested in the company at the end of the quarter. Millennium Management also initiated a $0.1 million position during the quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Cambium Learning Group, Inc. (NASDAQ:ABCD) but similarly valued. These stocks are West Marine, Inc. (NASDAQ:WMAR), CECO Environmental Corp. (NASDAQ:CECE), LeMaitre Vascular Inc (NASDAQ:LMAT), and Lipocine Inc (NASDAQ:LPCN). All of these stocks’ market caps are closest to ABCD’s market cap.

As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $33 million. That figure was $5 million in ABCD’s case. CECO Environmental Corp. (NASDAQ:CECE) is the most popular stock in this table. On the other hand West Marine, Inc. (NASDAQ:WMAR) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Cambium Learning Group, Inc. (NASDAQ:ABCD) is even less popular than WMAR. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.