Have Hedge Funds Found Something to Love in K12 Inc. (LRN)?

As one would reasonably expect, some big names have jumped into K12 Inc. (NYSE:LRN) headfirst. Royce & Associates, led by Chuck Royce, initiated the biggest position in K12 Inc. (NYSE:LRN). Royce & Associates had $3.5 million invested in the company at the end of the quarter. Neil Chriss’ Hutchin Hill Capital also made a $0.4 million investment in the stock during the quarter. The following funds were also among the new LRN investors: Joshua Packwood and Schuster Tanger’s Radix Partners, David Costen Haley’s HBK Investments, and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as K12 Inc. (NYSE:LRN) but similarly valued. These stocks are Newpark Resources Inc (NYSE:NR), Sabine Royalty Trust (NYSE:SBR), Unifi, Inc. (NYSE:UFI), and PennantPark Investment Corp. (NASDAQ:PNNT). All of these stocks’ market caps are similar to LRN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NR 12 43835 -3
SBR 7 13332 0
UFI 9 68164 0
PNNT 5 1759 0

As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $32 million. That figure was $65 million in LRN’s case. Newpark Resources Inc (NYSE:NR) is the most popular stock in this table. On the other hand PennantPark Investment Corp. (NASDAQ:PNNT) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks K12 Inc. (NYSE:LRN) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Disclosure: None