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Is Strayer Education Inc (STRA) Going to Burn These Hedge Funds?

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Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.

Is Strayer Education Inc (NASDAQ:STRA) a bargain? The best stock pickers are definitely taking a bearish view. The number of bullish hedge fund bets shrunk by 2 recently. There were 13 hedge funds in our database with STRA holdings at the end of the previous quarter, versus 11 at the end of Q3. At the end of this article we will also compare STRA to other stocks including Meta Financial Group Inc. (NASDAQ:CASH), SunCoke Energy, Inc (NYSE:SXC), and InnerWorkings, Inc. (NASDAQ:INWK) to get a better sense of its popularity.

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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

Tyler Olson/Shutterstock.com

Tyler Olson/Shutterstock.com

Now, we’re going to take a gander at the fresh action regarding Strayer Education Inc (NASDAQ:STRA).

What have hedge funds been doing with Strayer Education Inc (NASDAQ:STRA)?

At the end of the third quarter, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -15% from the second quarter of 2016. Below, you can check out the change in hedge fund sentiment towards STRA over the last 5 quarters. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

HedgeFund

When looking at the institutional investors followed by Insider Monkey, Goodnow Investment Group, led by Edward Goodnow, holds the largest position in Strayer Education Inc (NASDAQ:STRA). Goodnow Investment Group has a $23.2 million position in the stock, comprising 5.5% of its 13F portfolio. The second most bullish fund manager is Renaissance Technologies, one of the largest hedge funds in the world, holding a $15.5 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish consist of Ken Griffin’s Citadel Investment Group, Cliff Asness’ AQR Capital Management and D E Shaw. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

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