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Do Hedge Funds Love New Oriental Education & Tech Grp (ADR) (EDU)?

Judging by the fact that New Oriental Education & Tech Grp (ADR) (NYSE:EDU) has experienced bearish sentiment from the entirety of the hedge funds we track, logic holds that there was a specific group of hedge funds who were dropping their entire stakes by the end of the third quarter. Interestingly, Ted Kang’s Kylin Management dumped the biggest stake of the 700 funds watched by Insider Monkey, totaling an estimated $40.3 million in stock. George Soros’s fund, Soros Fund Management, also said goodbye to its stock, about $31.7 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 7 funds by the end of the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to New Oriental Education & Tech Grp (ADR) (NYSE:EDU). These stocks are Elbit Systems Ltd. (USA) (NASDAQ:ESLT), Post Properties Inc (NYSE:PPS), Air Lease Corp (NYSE:AL), and Brinker International, Inc. (NYSE:EAT). This group of stocks’ market caps are closest to EDU’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ESLT 4 10496 2
PPS 18 174438 -3
AL 27 511401 -2
EAT 27 213658 -4

As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $227 million. That figure was $168 million in EDU’s case. Air Lease Corp (NYSE:AL) is the most popular stock in this table. On the other hand Elbit Systems Ltd. (USA) (NASDAQ:ESLT) is the least popular one with only 4 bullish hedge fund positions. New Oriental Education & Tech Grp (ADR) (NYSE:EDU) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal, and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, AL might be a better candidate to consider a long position.

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