We can judge whether Strayer Education Inc (NASDAQ:STRA) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, research shows that these picks historically outperformed the market when we factor in known risk factors.
Is Strayer Education Inc (NASDAQ:STRA) undervalued? The best stock pickers are taking an optimistic view. The number of long hedge fund bets went up by 2 recently. Strayer Education Inc was in 18 hedge funds’ portfolios at the end of the third quarter of 2015. There were 16 hedge funds in our database with Strayer Education Inc holdings at the end of the previous quarter. 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 Echo Global Logistics, Inc. (NASDAQ:ECHO), Navios Maritime Partners L.P. (NYSE:NMM), and Photronics, Inc. (NASDAQ:PLAB) to gather more data points.
Follow Strategic Education Inc. (NASDAQ:STRA)
Follow Strategic Education Inc. (NASDAQ:STRA)
In the 21st century investor’s toolkit there are a multitude of gauges market participants use to grade their holdings. A pair of the most innovative gauges are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the top picks of the best hedge fund managers can outpace the market by a superb amount (see the details here).
Keeping this in mind, let’s analyze the latest action surrounding Strayer Education Inc (NASDAQ:STRA).
How are hedge funds trading Strayer Education Inc (NASDAQ:STRA)?
At Q3’s end, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 13% boost from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes considerably (or had already accumulated large positions).
According to Insider Monkey’s hedge fund database, Goodnow Investment Group, managed by Edward Goodnow, holds the most valuable position in Strayer Education Inc (NASDAQ:STRA). Goodnow Investment Group has a $34.2 million position in the stock, comprising 6.6% of its 13F portfolio. The second-largest stake is held by Renaissance Technologies, holding a $15 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Other investment firms that hold long positions contain D E Shaw, Cliff Asness’ AQR Capital Management, and Israel Englander’s Millennium Management.
Consequently, key money managers have been driving this bullishness. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, created the most outsized position in Strayer Education Inc (NASDAQ:STRA). Marshall Wace LLP had $0.4 million invested in the company at the end of the quarter. Chao Ku’s Nine Chapters Capital Management also made a $0.4 million investment in the stock during the quarter. The other funds with brand new Strayer Education Inc positions are Matthew Hulsizer’s PEAK6 Capital Management, and Michael Platt and William Reeves’ BlueCrest Capital Mgmt.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Strayer Education Inc (NASDAQ:STRA) but similarly valued. We will take a look at Echo Global Logistics, Inc. (NASDAQ:ECHO), Navios Maritime Partners L.P. (NYSE:NMM), Photronics, Inc. (NASDAQ:PLAB), and Cavco Industries, Inc. (NASDAQ:CVCO). This group of stocks’ market valuations match Strayer Education Inc’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ECHO | 16 | 72633 | -3 |
| NMM | 4 | 3609 | -2 |
| PLAB | 20 | 53873 | 6 |
| CVCO | 8 | 153581 | -4 |
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $71 million. That figure was $66 million in Strayer Education Inc’s case. Photronics, Inc. (NASDAQ:PLAB) is the most popular stock in this table. On the other hand Navios Maritime Partners L.P. (NYSE:NMM) is the least popular one with only 4 bullish hedge fund positions. Strayer Education Inc (NASDAQ:STRA) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal. However, given the greater interest and growing sentiment for Photronics, Inc., it might be a better candidate to consider a long position in.
