We at Insider Monkey have gone over 738 13F filings that hedge funds and famous value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st. In this article we look at what those investors think of Adtalem Global Education Inc. (NYSE:ATGE).
Adtalem Global Education Inc. (NYSE:ATGE) was in 16 hedge funds' portfolios at the end of the first quarter of 2019. ATGE investors should pay attention to a decrease in activity from the world's largest hedge funds in recent months. There were 20 hedge funds in our database with ATGE positions at the end of the previous quarter. Our calculations also showed that atge isn't among the 30 most popular stocks among hedge funds.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
[caption id="attachment_30621" align="aligncenter" width="487"] Cliff Asness of AQR Capital Management[/caption]
Let's take a gander at the key hedge fund action encompassing Adtalem Global Education Inc. (NYSE:ATGE).
How are hedge funds trading Adtalem Global Education Inc. (NYSE:ATGE)?
At the end of the first quarter, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -20% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards ATGE over the last 15 quarters. With hedgies' sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Cliff Asness's AQR Capital Management has the number one position in Adtalem Global Education Inc. (NYSE:ATGE), worth close to $61.1 million, accounting for 0.1% of its total 13F portfolio. Coming in second is Ariel Investments, managed by John W. Rogers, which holds a $44.1 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism encompass Noah Levy and Eugene Dozortsev's Newtyn Management, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital and D. E. Shaw's D E Shaw.
Because Adtalem Global Education Inc. (NYSE:ATGE) has faced falling interest from the entirety of the hedge funds we track, logic holds that there was a specific group of funds that elected to cut their entire stakes last quarter. It's worth mentioning that Minhua Zhang's Weld Capital Management cut the biggest position of all the hedgies watched by Insider Monkey, worth about $0.8 million in stock. David Costen Haley's fund, HBK Investments, also dropped its stock, about $0.7 million worth. These transactions are important to note, as total hedge fund interest fell by 4 funds last quarter.
Let's check out hedge fund activity in other stocks similar to Adtalem Global Education Inc. (NYSE:ATGE). These stocks are Cactus, Inc. (NYSE:WHD), Quaker Chemical Corp (NYSE:KWR), Avista Corp (NYSE:AVA), and Vishay Intertechnology, Inc. (NYSE:VSH). This group of stocks' market caps are closest to ATGE's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WHD,27,291995,9 KWR,11,145447,-2 AVA,18,176178,0 VSH,21,339355,2 Average,19.25,238244,2.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.25 hedge funds with bullish positions and the average amount invested in these stocks was $238 million. That figure was $176 million in ATGE's case. Cactus, Inc. (NYSE:WHD) is the most popular stock in this table. On the other hand Quaker Chemical Corp (NYSE:KWR) is the least popular one with only 11 bullish hedge fund positions. Adtalem Global Education Inc. (NYSE:ATGE) is not the least popular stock in this group but hedge fund interest is still below average. 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 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately ATGE wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); ATGE investors were disappointed as the stock returned -1.6% 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 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.