Here is What Hedge Funds Think About Universal Technical Institute, Inc. (UTI): Education Management Corp (EDMC), GP Strategies Corporation (GPX)

Universal Technical Institute, Inc. (NYSE:UTI) shareholders have witnessed an increase in activity from the world’s largest hedge funds lately.

Chuck Royce

At the moment, there are plenty of gauges shareholders can use to watch Mr. Market. Two of the most underrated are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best money managers can outpace the broader indices by a very impressive margin (see just how much).

Equally as important, bullish insider trading activity is a second way to break down the stock market universe. Obviously, there are plenty of motivations for a bullish insider to cut shares of his or her company, but just one, very obvious reason why they would behave bullishly. Several empirical studies have demonstrated the market-beating potential of this tactic if “monkeys” know what to do (learn more here).

Keeping this in mind, it’s important to take a glance at the key action encompassing Universal Technical Institute, Inc. (NYSE:UTI).

Hedge fund activity in Universal Technical Institute, Inc. (NYSE:UTI)

At the end of the fourth quarter, a total of 10 of the hedge funds we track were long in this stock, a change of 25% from the previous quarter. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were boosting their holdings considerably.

Of the funds we track, Alexander Medina Seaver’s Stadium Capital Management had the biggest position in Universal Technical Institute, Inc. (NYSE:UTI), worth close to $36 million, comprising 8.6% of its total 13F portfolio. Sitting at the No. 2 spot is Royce & Associates, managed by Chuck Royce, which held a $26 million position; 0% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions include Jim Simons’s Renaissance Technologies, Mario Gabelli’s GAMCO Investors and Ken Griffin’s Citadel Investment Group.

As industrywide interest jumped, key money managers were breaking ground themselves. Citadel Investment Group, managed by Ken Griffin, assembled the most outsized position in Universal Technical Institute, Inc. (NYSE:UTI). Citadel Investment Group had 1 million invested in the company at the end of the quarter. Charles Davidson’s Wexford Capital also initiated a $0 million position during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group.

What do corporate executives and insiders think about Universal Technical Institute, Inc. (NYSE:UTI)?

Bullish insider trading is best served when the primary stock in question has seen transactions within the past half-year. Over the latest half-year time period, Universal Technical Institute, Inc. (NYSE:UTI) has experienced 1 unique insiders buying, and 3 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Universal Technical Institute, Inc. (NYSE:UTI). These stocks are Education Management Corp (NASDAQ:EDMC), GP Strategies Corporation (NYSE:GPX), Capella Education Company (NASDAQ:CPLA), Franklin Covey Co. (NYSE:FC), and ITT Educational Services, Inc. (NYSE:ESI). All of these stocks are in the education & training services industry and their market caps match UTI’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Education Management Corp (NASDAQ:EDMC) 6 1 0
GP Strategies Corporation (NYSE:GPX) 8 2 4
Capella Education Company (NASDAQ:CPLA) 13 0 0
Franklin Covey Co. (NYSE:FC) 3 1 1
ITT Educational Services, Inc. (NYSE:ESI) 18 0 1

With the results shown by the aforementioned research, everyday investors must always pay attention to hedge fund and insider trading activity, and Universal Technical Institute, Inc. (NYSE:UTI) is an important part of this process.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.