Diamondback Energy Inc (FANG); Career Education Corp. (CECO): Why Funds Are Cutting Stakes in these Stocks

Blum Capital Partners is a San Francisco-based investment firm that was founded in 1975 by Richard Blum. Mr. Blum is a Business Administration graduate from the University of California, who also received an MBA from this institution and was employed by Sutro & Co for 17 years. His fund invests primarily in small-to-mid-cap companies operating in both the public and private equity markets. Furthermore, according to its last 13F filing, Blum Capital Partners boasted an equity portfolio with a market value of $415 million, which included only four positions. CBRE Group Inc (NYSE:CBG) was the fund’s largest holding, with a stake of 11.71 million shares, representing more than 83% of its equity portfolio.

Richard Blum

Mr. Blum’s fund has held an activist stake in Career Education Corp. (NASDAQ:CECO) for several years, while maintaining its position unaltered from the end of the third quarter of 2013 to the end of the third quarter of 2014. During that time, the stock gained an impressive 84.7%, while share prices have grown by more than 12% over the past year. After taking a dive in May, Career Education’s share prices have been climbing gradually and experiencing pronounced growth over the past six months.

Despite the recent sale of a portion of its shares, Blum Capital Partners is still the company’s largest institutional investor amongst the funds we track. Furthermore, other hedge funds are also betting on Career Education Corp. (NASDAQ:CECO), including Eric Semler’s TCS Capital Management. The New York-based investment firm held a stake of 2.51 million shares, after disclosing a 12% increase to its holding in its last 13F filing for the period ending September 30. Cliff Asness’ AQR Capital Management is also betting on the stock, disclosing ownership of 4.11 million shares as of the end of 2014.

Disclosure: None