Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Grand Canyon Education Inc (NASDAQ:LOPE) based on that data.
Is Grand Canyon Education Inc (NASDAQ:LOPE) worth your attention right now? The smart money is getting more bullish. The number of long hedge fund bets improved by 8 lately. Our calculations also showed that LOPE 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). LOPE was in 28 hedge funds’ portfolios at the end of March. There were 20 hedge funds in our database with LOPE positions at the end of the previous quarter. Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Noam Gottesman of GLG Partners
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one as well as this tiny cannabis play. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a glance at the new hedge fund action surrounding Grand Canyon Education Inc (NASDAQ:LOPE).
How are hedge funds trading Grand Canyon Education Inc (NASDAQ:LOPE)?
At Q1’s end, a total of 28 of the hedge funds tracked by Insider Monkey were long this stock, a change of 40% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards LOPE over the last 18 quarters. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
More specifically, Park West Asset Management was the largest shareholder of Grand Canyon Education Inc (NASDAQ:LOPE), with a stake worth $60.2 million reported as of the end of September. Trailing Park West Asset Management was Stadium Capital Management, which amassed a stake valued at $29.2 million. Sabrepoint Capital, Millennium Management, and No Street Capital 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 Stadium Capital Management allocated the biggest weight to Grand Canyon Education Inc (NASDAQ:LOPE), around 16.53% of its 13F portfolio. Sabrepoint Capital is also relatively very bullish on the stock, earmarking 7.11 percent of its 13F equity portfolio to LOPE.
As one would reasonably expect, some big names have jumped into Grand Canyon Education Inc (NASDAQ:LOPE) headfirst. Park West Asset Management, managed by Peter S. Park, assembled the largest position in Grand Canyon Education Inc (NASDAQ:LOPE). Park West Asset Management had $60.2 million invested in the company at the end of the quarter. Alexander Medina Seaver’s Stadium Capital Management also made a $29.2 million investment in the stock during the quarter. The other funds with brand new LOPE positions are Jeff Osher’s No Street Capital, and John Overdeck and David Siegel’s Two Sigma Advisors.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Grand Canyon Education Inc (NASDAQ:LOPE) but similarly valued. These stocks are ServiceMaster Global Holdings Inc (NYSE:SERV), J2 Global Inc (NASDAQ:JCOM), Inphi Corporation (NYSE:IPHI), and Under Armour Inc (NYSE:UA). This group of stocks’ market caps match LOPE’s market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SERV,31,593890,-11 JCOM,21,219272,-2 IPHI,36,482361,5 UA,37,660755,5 Average,31.25,489070,-0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.25 hedge funds with bullish positions and the average amount invested in these stocks was $489 million. That figure was $186 million in LOPE’s case. Under Armour Inc (NYSE:UA) is the most popular stock in this table. On the other hand J2 Global Inc (NASDAQ:JCOM) is the least popular one with only 21 bullish hedge fund positions. Grand Canyon Education Inc (NASDAQ:LOPE) is not the least popular stock in this group but hedge fund interest is still below average. 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 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. A small number of hedge funds were also right about betting on LOPE as the stock returned 27.9% during the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.