New Oriental Education & Tech Grp (ADR) (NYSE:EDU) was in 9 hedge funds' portfolio at the end of March. EDU investors should be aware of a decrease in support from the world's most elite money managers recently. There were 9 hedge funds in our database with EDU holdings at the end of the previous quarter.
To most shareholders, hedge funds are seen as underperforming, outdated financial tools of yesteryear. While there are greater than 8000 funds trading today, we at Insider Monkey hone in on the crème de la crème of this club, around 450 funds. It is widely believed that this group oversees the majority of all hedge funds' total asset base, and by watching their highest performing picks, we have unearthed a number of investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we've began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Just as integral, bullish insider trading sentiment is a second way to break down the world of equities. Obviously, there are a variety of stimuli for an executive to sell shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several empirical studies have demonstrated the valuable potential of this tactic if investors know what to do (learn more here).
Now, we're going to take a gander at the latest action encompassing New Oriental Education & Tech Grp (ADR) (NYSE:EDU).
Heading into Q2, a total of 9 of the hedge funds we track held long positions in this stock, a change of 0% from one quarter earlier. With hedgies' capital changing hands, there exists a few key hedge fund managers who were upping their stakes considerably.
Of the funds we track, Brookside Capital, managed by Bain Capital, holds the biggest position in New Oriental Education & Tech Grp (ADR) (NYSE:EDU). Brookside Capital has a $113.7 million position in the stock, comprising 2.5% of its 13F portfolio. On Brookside Capital's heels is Sloane Robinson Investment Management, managed by Hugh Sloane, which held a $30.6 million position; the fund has 50.1% of its 13F portfolio invested in the stock. Some other hedgies that hold long positions include Lei Zhang's Hillhouse Capital Management, Ken Griffin's Citadel Investment Group and Frank Brosens's Taconic Capital.
Due to the fact that New Oriental Education & Tech Grp (ADR) (NYSE:EDU) has experienced a declination in interest from the smart money, it's easy to see that there was a specific group of hedgies who were dropping their entire stakes in Q1. Interestingly, Robert Karr's Joho Capital dumped the biggest investment of all the hedgies we monitor, worth an estimated $37.5 million in stock.. Richard Driehaus's fund, Driehaus Capital, also dropped its stock, about $1.8 million worth. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Insider buying is best served when the company in focus has seen transactions within the past half-year. Over the latest six-month time frame, New Oriental Education & Tech Grp (ADR) (NYSE:EDU) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).
Let's also review hedge fund and insider activity in other stocks similar to New Oriental Education & Tech Grp (ADR) (NYSE:EDU). These stocks are Education Management Corp (NASDAQ:EDMC), K12 Inc. (NYSE:LRN), Strayer Education Inc (NASDAQ:STRA), Bridgepoint Education Inc (NYSE:BPI), and TAL Education Group (ADR) (NYSE:XRS). All of these stocks are in the education & training services industry and their market caps are similar to EDU's market cap.