The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 817 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, about a month before the elections. In this article we look at what those investors think of New Oriental Education & Technology Group Inc. (NYSE:EDU).
Is EDU a good stock to buy now? Investors who are in the know were taking an optimistic view. The number of bullish hedge fund bets advanced by 1 in recent months. New Oriental Education & Technology Group Inc. (NYSE:EDU) was in 40 hedge funds’ portfolios at the end of September. The all time high for this statistic is 50. Our calculations also showed that EDU isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 39 hedge funds in our database with EDU positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
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Do Hedge Funds Think EDU Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 40 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in EDU over the last 21 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of New Oriental Education & Technology Group Inc. (NYSE:EDU), with a stake worth $340.2 million reported as of the end of September. Trailing Renaissance Technologies was Tiger Global Management LLC, which amassed a stake valued at $320.2 million. Alkeon Capital Management, Farallon Capital, and GQG Partners were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Serenity Capital allocated the biggest weight to New Oriental Education & Technology Group Inc. (NYSE:EDU), around 15.69% of its 13F portfolio. Kylin Management is also relatively very bullish on the stock, designating 14.53 percent of its 13F equity portfolio to EDU.
Now, key money managers have been driving this bullishness. Aubrey Capital Management, managed by Andrew Dalrymple and Barry McCorkell, established the most valuable position in New Oriental Education & Technology Group Inc. (NYSE:EDU). Aubrey Capital Management had $20.6 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also made a $19.5 million investment in the stock during the quarter. The following funds were also among the new EDU investors: Greg Eisner’s Engineers Gate Manager, Dmitry Balyasny’s Balyasny Asset Management, and Jinghua Yan’s TwinBeech Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as New Oriental Education & Technology Group Inc. (NYSE:EDU) but similarly valued. These stocks are Unity Software Inc. (NYSE:U), American International Group Inc (NYSE:AIG), Genmab A/S (NASDAQ:GMAB), Hilton Worldwide Holdings Inc (NYSE:HLT), Palo Alto Networks Inc (NYSE:PANW), Roku, Inc. (NASDAQ:ROKU), and LyondellBasell Industries NV (NYSE:LYB). All of these 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|
View table here if you experience formatting issues.
As you can see these stocks had an average of 42.4 hedge funds with bullish positions and the average amount invested in these stocks was $2660 million. That figure was $1754 million in EDU’s case. Palo Alto Networks Inc (NYSE:PANW) is the most popular stock in this table. On the other hand Genmab A/S (NASDAQ:GMAB) is the least popular one with only 18 bullish hedge fund positions. New Oriental Education & Technology Group Inc. (NYSE:EDU) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for EDU is 56.8. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and surpassed the market again by 15.8 percentage points. Unfortunately EDU wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); EDU investors were disappointed as the stock returned 7.4% since the end of September (through 12/14) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.