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The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 821 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 March 31st, a week after the market trough. Now, we are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article you are going to find out whether hedge funds thoughtLaureate Education, Inc. (NASDAQ:LAUR) was a good investment heading into the second quarter and how the stock traded in comparison to the top hedge fund picks.
Is Laureate Education, Inc. (NASDAQ:LAUR) a buy, sell, or hold? Hedge funds were in a bearish mood. The number of bullish hedge fund positions were cut by 9 recently. Our calculations also showed that LAUR isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most traders, hedge funds are seen as slow, outdated investment tools of yesteryear. While there are over 8000 funds with their doors open at the moment, Our researchers look at the aristocrats of this group, around 850 funds. These investment experts oversee the lion's share of the hedge fund industry's total capital, and by keeping an eye on their finest stock picks, Insider Monkey has unsheathed many investment strategies that have historically outpaced the broader indices. Insider Monkey's flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
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Steven Tananbaum of GoldenTree Asset Management[/caption]
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, on one site we found out that NBA champion Isiah Thomas is now the CEO of this cannabis company. The same site also talks about a snack manufacturer that’s growing at 30% annually. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Hedge fund sentiment towards Tesla reached its all time high at the end of 2019 and Tesla shares more than tripled this year. We are trying to identify other EV revolution winners, so if you have any good ideas send us an email. With all of this in mind let's check out the recent hedge fund action encompassing Laureate Education, Inc. (NASDAQ:LAUR).
What have hedge funds been doing with Laureate Education, Inc. (NASDAQ:LAUR)?
At the end of the first quarter, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -26% from the previous quarter. On the other hand, there were a total of 21 hedge funds with a bullish position in LAUR a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Laureate Education, Inc. (NASDAQ:LAUR) was held by Park West Asset Management, which reported holding $54.5 million worth of stock at the end of September. It was followed by Maple Rock Capital with a $29.8 million position. Other investors bullish on the company included Fir Tree, Nut Tree Capital, and Alyeska Investment Group. In terms of the portfolio weights assigned to each position Nut Tree Capital allocated the biggest weight to Laureate Education, Inc. (NASDAQ:LAUR), around 7.99% of its 13F portfolio. Maple Rock Capital is also relatively very bullish on the stock, earmarking 7.65 percent of its 13F equity portfolio to LAUR.
Because Laureate Education, Inc. (NASDAQ:LAUR) has witnessed falling interest from hedge fund managers, logic holds that there exists a select few money managers that decided to sell off their full holdings heading into Q4. It's worth mentioning that Robert Joseph Caruso's Select Equity Group dumped the largest investment of all the hedgies monitored by Insider Monkey, valued at an estimated $26.8 million in stock, and Angela Aldrich's Bayberry Capital Partners was right behind this move, as the fund dropped about $13.4 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 9 funds heading into Q4.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Laureate Education, Inc. (NASDAQ:LAUR) but similarly valued. We will take a look at Macquarie Infrastructure Corporation (NYSE:MIC), LivaNova PLC (NASDAQ:LIVN), GATX Corporation (NYSE:GATX), and Franklin Electric Co. (NASDAQ:FELE). This group of stocks' market values resemble LAUR's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MIC,30,251515,-4 LIVN,24,235932,2 GATX,13,169186,-8 FELE,16,174928,2 Average,20.75,207890,-2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.75 hedge funds with bullish positions and the average amount invested in these stocks was $208 million. That figure was $198 million in LAUR's case. Macquarie Infrastructure Corporation (NYSE:MIC) is the most popular stock in this table. On the other hand GATX Corporation (NYSE:GATX) is the least popular one with only 13 bullish hedge fund positions. Laureate Education, Inc. (NASDAQ:LAUR) 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. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th but beat the market by 15.5 percentage points. Unfortunately LAUR wasn't nearly as popular as these 10 stocks and hedge funds that were betting on LAUR were disappointed as the stock returned -5.2% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.