DeVry Inc. (NYSE:DV) shareholders have witnessed a decrease in enthusiasm from smart money in recent months.
According to most shareholders, hedge funds are seen as unimportant, old financial tools of the past. While there are over 8000 funds trading today, we at Insider Monkey choose to focus on the top tier of this group, around 450 funds. It is widely believed that this group controls the lion’s share of the hedge fund industry’s total asset base, and by keeping an eye on their highest performing picks, we have come up with a few investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Just as key, bullish insider trading activity is another way to parse down the world of equities. Obviously, there are plenty of motivations for a corporate insider to drop shares of his or her company, but only one, very clear reason why they would buy. Various academic studies have demonstrated the impressive potential of this strategy if you know where to look (learn more here).
With all of this in mind, let’s take a peek at the latest action encompassing DeVry Inc. (NYSE:DV).
What have hedge funds been doing with DeVry Inc. (NYSE:DV)?
At the end of the first quarter, a total of 16 of the hedge funds we track were bullish in this stock, a change of -30% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their holdings considerably.
When looking at the hedgies we track, John W. Rogers’s Ariel Investments had the most valuable position in DeVry Inc. (NYSE:DV), worth close to $105.5 million, accounting for 1.8% of its total 13F portfolio. The second largest stake is held by International Value Advisers, managed by Charles de Vaulx, which held a $89.8 million position; 2.1% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC, D. E. Shaw’s D E Shaw and Gregg J. Powers’s Private Capital Management.
Seeing as DeVry Inc. (NYSE:DV) has faced declining sentiment from the aggregate hedge fund industry, we can see that there were a few fund managers that slashed their entire stakes heading into Q2. Intriguingly, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dropped the biggest position of the “upper crust” of funds we track, totaling close to $53.5 million in stock.. Wilmot B. Harkey and Daniel Mack’s fund, Nantahala Capital Management, also cut its call options., about $8.1 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 7 funds heading into Q2.
What do corporate executives and insiders think about DeVry Inc. (NYSE:DV)?
Insider purchases made by high-level executives is at its handiest when the company we’re looking at has experienced transactions within the past 180 days. Over the latest 180-day time frame, DeVry Inc. (NYSE:DV) has seen 2 unique insiders buying, and 2 insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity in other stocks similar to DeVry Inc. (NYSE:DV). These stocks are TAL Education Group (ADR) (NYSE:XRS), K12 Inc. (NYSE:LRN), Grand Canyon Education Inc (NASDAQ:LOPE), The Washington Post Company (NYSE:WPO), and Apollo Group Inc (NASDAQ:APOL). This group of stocks belong to the education & training services industry and their market caps resemble DV’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|TAL Education Group (ADR) (NYSE:XRS)||6||0||0|
|K12 Inc. (NYSE:LRN)||5||0||2|
|Grand Canyon Education Inc (NASDAQ:LOPE)||13||0||6|
|The Washington Post Company (NYSE:WPO)||19||0||1|
|Apollo Group Inc (NASDAQ:APOL)||27||0||2|
With the returns exhibited by our strategies, everyday investors should always monitor hedge fund and insider trading activity, and DeVry Inc. (NYSE:DV) applies perfectly to this mantra.