What Do Hedge Funds Think of Apollo Education Group Inc (APOL)?

Investing in small cap stocks has historically been a way to outperform the market, as small cap companies typically grow faster on average than the blue chips. That outperformance comes with a price, however, as there are occasional periods of higher volatility. The time period between June 25 and the end of October was one of those periods, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points. Given that the funds we track tend to have a disproportionate amount of their portfolios in smaller cap stocks, they have seen some volatility in their portfolios too. Actually their moves are potentially one of the factors that contributed to this volatility. In this article, we use our extensive database of hedge fund holdings to find out what the smart money thinks of Apollo Education Group Inc (NASDAQ:APOL).

Apollo Education Group Inc (NASDAQ:APOL) investors should be aware of a decrease in enthusiasm from smart money in recent months. At the end of this article we will also compare APOL to other stocks including Cott Corporation (USA) (NYSE:COT), Finisar Corporation (NASDAQ:FNSR), and TriNet Group Inc (NYSE:TNET) to get a better sense of its popularity.

With all of this in mind, we’re going to take a peek at the new action encompassing Apollo Education Group Inc (NASDAQ:APOL).

How are hedge funds trading Apollo Education Group Inc (NASDAQ:APOL)?

At Q3’s end, a total of 25 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -7% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, First Pacific Advisors LLC, managed by Robert Rodriguez and Steven Romick, holds the number one position in Apollo Education Group Inc (NASDAQ:APOL). First Pacific Advisors LLC has a $84.3 million position in the stock, comprising 0.7% of its 13F portfolio. The second most bullish fund manager is Larry Robbins of Glenview Capital, with a $76.2 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Other peers that are bullish contain Joel Greenblatt’s Gotham Asset Management, Donald Yacktman’s Yacktman Asset Management and Ken Griffin’s Citadel Investment Group.

Judging by the fact that Apollo Education Group Inc (NASDAQ:APOL) has faced declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there is a sect of hedgies that elected to cut their positions entirely heading into Q4. Interestingly, Robert I. Usdan and Wayne K. Goldstein’s Endicott Management dumped the biggest investment of all the hedgies tracked by Insider Monkey, totaling close to $0.5 million in stock. Matthew Tewksbury’s fund, Stevens Capital Management, also cut its stock, about $0.4 million worth. These transactions are important to note, as total hedge fund interest was cut by 2 funds heading into Q4.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Apollo Education Group Inc (NASDAQ:APOL) but similarly valued. These stocks are Cott Corporation (USA) (NYSE:COT), Finisar Corporation (NASDAQ:FNSR), TriNet Group Inc (NYSE:TNET), and Ramco-Gershenson Properties Trust (NYSE:RPT). All of these stocks’ market caps match APOL’s market cap.

As you can see these stocks had an average of 18.75 hedge funds with bullish positions and the average amount invested in these stocks was $159 million. That figure was $325 million in APOL’s case. Cott Corporation (USA) (NYSE:COT) is the most popular stock in this table. On the other hand Ramco-Gershenson Properties Trust (NYSE:RPT) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Apollo Education Group Inc (NASDAQ:APOL) 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.