January 7, 2012
Article from Seeking Alpha
With the economy down and unemployment high, more and more people are going back to college – starting degrees, finishing studies, learning new skills. The thing is that given the high cost of college education and more stringent lending many of these people are choosing non-traditional schools, like online universities and trade schools. In turn, this creates a lot of opportunities for for-profit education companies. The industry is recently facing scrutiny from regulators and this creates some uncertainty in the industry. Investing is riskier in these situations but the rewards are higher if investors could pick the right stocks. We track hedge fund managers’ bets in these situations because they are typically more informed than many of their financial peers thanks to teams of analysts. Here is a list of education stocks that hedge funds are buying:
New Oriental Education & Technology (EDU): Of the 300+ hedge funds we track, 22 had positions in EDU at the end of the third quarter, up from 21 at the end of the second quarter. However, the total volume of hedge fund investment declined in the third quarter, moving from $653.90 million at the end of June to $532.01 million at the end of September. The decline in hedge fund interest didn’t faze Stephen Mandel’s Lone Pine Capital. The fund increased its holdings in the company by +285% in the third quarter, bringing its total position to a value of roughly $154.52 million at the end of September.
Bridgepoint Education, Inc. (BPI): There were 21 hedge funds invested in BPI at the end of the third quarter, compared to 19 at the end of the second quarter. Total hedge fund investment in the company also declined, going from $67.59 million to $51.82 million. Robert Pitts’ Steadfast Capital Management and Jim Simons’ Renaissance Technologies both increased their positions in BPI during the third quarter.
Apollo Group, Inc. (APOL): The number of hedge funds invested in APOL went from 26 at the end of the second quarter to 21 at the end of the third quarter. The total volume of hedge fund investment in APOL also slipped in the third quarter, from $891.52 million at the end of June to $584.54 million at the end of September. Lee Ainslie’s Maverick Capital is a fan of APOL. The fund had $323.33 million in the company at the end of the third quarter. Jim Simons’ Renaissance Technologies, Cliff Asness’ AQR Capital Management and Ken Griffin’s Citadel Investment Group are also fans.
DeVry, Inc. (DV): There were 19 hedge funds invested in DV at the end of the third quarter, up from 17 at the end of the second quarter. The total volume of hedge fund investment in the company went from $333.70 million at the end of June to $195.59 million at the end of September. John W. Rogers’s Ariel Investments had $93.82 million in the company at the end of the third quarter. Ray Dalio’s Bridgewater Associates is also a fan of DV.
ITT Educational Services, Inc. (ESI): Total hedge fund investment in ESI went from $623.91 million across 17 funds at the end of the second quarter to $533.11 million over 18 funds at the end of the second quarter. Richard Blum’s Blum Capital Partners had $238.70 million in ESI at the end of the third quarter, while Robert Joseph Caruso’s Select Equity Group increased its position in the company during the third quarter.
Strayer Education (STRA): There were 13 hedge funds invested in STRA at the end of the third quarter, down from 16 at the end of the second quarter. Total hedge fund investment in the company also fell, going from $262.73 million at the end of June to $175.28 million at the end of September. Chuck Royce’s Royce & Associates increased its stake in STRA by +23% during the third quarter to a value of $85.79 million while David Blood and Al Gore’s Generation Investment Management upped its holding by +7% in the third quarter to a value of $63.41 million.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Article from Seeking Alpha
