American Public Education, Inc. (NASDAQ:APEI) shareholders have witnessed an increase in hedge fund sentiment in recent months.
In the eyes of most traders, hedge funds are seen as underperforming, old financial vehicles of the past. While there are more than 8000 funds in operation at the moment, we hone in on the aristocrats of this group, about 450 funds. It is widely believed that this group has its hands on the lion’s share of the hedge fund industry’s total capital, and by paying attention to their top investments, we have come up with a few investment strategies that have historically beaten the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as beneficial, bullish insider trading sentiment is another way to parse down the investments you’re interested in. As the old adage goes: there are plenty of incentives for an upper level exec to get rid of shares of his or her company, but only one, very obvious reason why they would behave bullishly. Plenty of academic studies have demonstrated the valuable potential of this method if piggybackers know where to look (learn more here).
Consequently, let’s take a look at the latest action surrounding American Public Education, Inc. (NASDAQ:APEI).
What does the smart money think about American Public Education, Inc. (NASDAQ:APEI)?
Heading into Q2, a total of 11 of the hedge funds we track held long positions in this stock, a change of 83% from the first quarter. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their stakes substantially.
Of the funds we track, Bares Capital Management, managed by Brian Bares, holds the biggest position in American Public Education, Inc. (NASDAQ:APEI). Bares Capital Management has a $64.1 million position in the stock, comprising 8.2% of its 13F portfolio. On Bares Capital Management’s heels is Royce & Associates, managed by Chuck Royce, which held a $6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers that hold long positions include Gregg J. Powers’s Private Capital Management, Jim Simons’s Renaissance Technologies and Lisa Rapuano’s Lane Five Capital.
As aggregate interest increased, key hedge funds have been driving this bullishness. Private Capital Management, managed by Gregg J. Powers, initiated the most outsized position in American Public Education, Inc. (NASDAQ:APEI). Private Capital Management had 5.7 million invested in the company at the end of the quarter. Nick Niell’s Arrowgrass Capital Partners also initiated a $2.5 million position during the quarter. The following funds were also among the new APEI investors: Israel Englander’s Millennium Management, Paul Tudor Jones’s Tudor Investment Corp, and Ken Griffin’s Citadel Investment Group.
How are insiders trading American Public Education, Inc. (NASDAQ:APEI)?
Insider trading activity, especially when it’s bullish, is most useful when the primary stock in question has experienced transactions within the past six months. Over the last six-month time period, American Public Education, Inc. (NASDAQ:APEI) has experienced zero unique insiders buying, and 6 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to American Public Education, Inc. (NASDAQ:APEI). These stocks are Performant Financial Corp (NASDAQ:PFMT), COMSCORE, Inc. (NASDAQ:SCOR), Examworks Group, Inc. (NYSE:EXAM), Green Dot Corporation (NYSE:GDOT), and Comverse Inc (NASDAQ:CNSI). This group of stocks are in the business services industry and their market caps are closest to APEI’s market cap.