Is Capella Education Company (CPLA) A Good Stock To Buy?

Due to the fact that Capella Education Company (NASDAQ:CPLA) has witnessed bearish sentiment from the smart money, logic holds that there is a sect of funds that decided to sell off their entire stakes heading into Q4. It’s worth mentioning that Thomas Bancroft’s Makaira Partners cut the largest stake of the 700 funds studied by Insider Monkey, worth about $15.5 million in stock, and Joshua Packwood and Schuster Tanger’s Radix Partners was right behind this move, as the fund dropped about $0.4 million worth of shares.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Capella Education Company (NASDAQ:CPLA) but similarly valued. We will take a look at LHC Group, Inc. (NASDAQ:LHCG), ePlus Inc. (NASDAQ:PLUS), Easterly Government Properties Inc (NYSE:DEA), and Enviva Partners LP (NYSE:EVA). This group of stocks’ market values resemble CPLA’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
LHCG 19 71586 2
PLUS 9 28282 -2
DEA 8 51604 -2
EVA 2 4790 0

As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $39 million. That figure was $139 million in CPLA’s case. LHC Group, Inc. (NASDAQ:LHCG) is the most popular stock in this table. On the other hand Enviva Partners LP (NYSE:EVA) is the least popular one with only 2 bullish hedge fund positions. Capella Education Company (NASDAQ:CPLA) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard LHCG might be a better candidate to consider taking a long position in.

Disclosure: none.