Is Aspen Group Inc. (ASPU) A Good Stock To Buy?

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Aspen Group Inc. (NASDAQ:ASPU).

Is ASPU a good stock to buy? Hedge funds were in a bearish mood. The number of bullish hedge fund positions went down by 5 recently. Aspen Group Inc. (NASDAQ:ASPU) was in 4 hedge funds’ portfolios at the end of March. The all time high for this statistic is 10. Our calculations also showed that ASPU isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

In the eyes of most shareholders, hedge funds are perceived as underperforming, outdated financial tools of yesteryear. While there are greater than 8000 funds with their doors open today, We look at the top tier of this club, approximately 850 funds. These hedge fund managers administer the majority of the hedge fund industry’s total asset base, and by tailing their matchless picks, Insider Monkey has deciphered various investment strategies that have historically outpaced the broader indices. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Leon Cooperman of Omega Advisors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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. You can subscribe to our free daily newsletter on our homepage. With all of this in mind let’s analyze the recent hedge fund action surrounding Aspen Group Inc. (NASDAQ:ASPU).

Do Hedge Funds Think ASPU Is A Good Stock To Buy Now?

Heading into the second quarter of 2021, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -56% from the fourth quarter of 2020. By comparison, 6 hedge funds held shares or bullish call options in ASPU a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Leon Cooperman’s Omega Advisors has the number one position in Aspen Group Inc. (NASDAQ:ASPU), worth close to $9.9 million, comprising 0.6% of its total 13F portfolio. Sitting at the No. 2 spot is Royce & Associates, managed by Chuck Royce, which holds a $3 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining professional money managers that hold long positions comprise Peter A. Wright’s P.A.W. CAPITAL PARTNERS, Renaissance Technologies and . In terms of the portfolio weights assigned to each position P.A.W. CAPITAL PARTNERS allocated the biggest weight to Aspen Group Inc. (NASDAQ:ASPU), around 1.32% of its 13F portfolio. Omega Advisors is also relatively very bullish on the stock, dishing out 0.62 percent of its 13F equity portfolio to ASPU.

Seeing as Aspen Group Inc. (NASDAQ:ASPU) has experienced declining sentiment from hedge fund managers, logic holds that there was a specific group of hedgies who sold off their positions entirely heading into Q2. Intriguingly, Richard Driehaus’s Driehaus Capital dumped the largest stake of the 750 funds tracked by Insider Monkey, worth close to $7.8 million in stock, and Travis Cocke’s Voss Capital was right behind this move, as the fund cut about $4.2 million worth. These moves are interesting, as total hedge fund interest was cut by 5 funds heading into Q2.

Let’s also examine hedge fund activity in other stocks similar to Aspen Group Inc. (NASDAQ:ASPU). We will take a look at Immutep Limited (NASDAQ:IMMP), Power REIT (NYSE:PW), Mackinac Financial Corporation (NASDAQ:MFNC), Colony Bankcorp Inc (NASDAQ:CBAN), IMARA Inc. (NASDAQ:IMRA), Bogota Financial Corp. (NASDAQ:BSBK), and Anixa Biosciences, Inc. (NASDAQ:ANIX). This group of stocks’ market valuations match ASPU’s market valuation.

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As you can see these stocks had an average of 3.4 hedge funds with bullish positions and the average amount invested in these stocks was $9 million. That figure was $15 million in ASPU’s case. Mackinac Financial Corporation (NASDAQ:MFNC) is the most popular stock in this table. On the other hand Bogota Financial Corp. (NASDAQ:BSBK) is the least popular one with only 1 bullish hedge fund positions. Aspen Group Inc. (NASDAQ:ASPU) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ASPU is 49.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and beat the market again by 3.3 percentage points. Unfortunately ASPU wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ASPU were disappointed as the stock returned -3.3% since the end of March (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

Disclosure: None. This article was originally published at Insider Monkey.