Is Scholastic Corp (NASDAQ:SCHL) a bargain? Investors who are in the know are in a bullish mood. The number of bullish hedge fund bets increased by 1 lately.
In the financial world, there are plenty of indicators market participants can use to watch publicly traded companies. Two of the most useful are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite hedge fund managers can outperform the broader indices by a solid amount (see just how much).
Just as important, bullish insider trading activity is a second way to break down the world of equities. There are lots of motivations for an insider to drop shares of his or her company, but only one, very simple reason why they would initiate a purchase. Several academic studies have demonstrated the impressive potential of this strategy if investors understand where to look (learn more here).
With all of this in mind, let’s take a gander at the recent action regarding Scholastic Corp (NASDAQ:SCHL).
How have hedgies been trading Scholastic Corp (NASDAQ:SCHL)?
Heading into 2013, a total of 10 of the hedge funds we track were long in this stock, a change of 11% from the third quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes meaningfully.
According to our comprehensive database, Chuck Royce’s Royce & Associates had the largest position in Scholastic Corp (NASDAQ:SCHL), worth close to $95.6 million, comprising 0.3% of its total 13F portfolio. Sitting at the No. 2 spot is Cliff Asness of AQR Capital Management, with a $12.7 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedgies that are bullish include Jim Simons’s Renaissance Technologies, Joel Greenblatt’s Gotham Asset Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. Tudor Investment Corp, managed by Paul Tudor Jones, assembled the largest position in Scholastic Corp (NASDAQ:SCHL). Tudor Investment Corp had 0.7 million invested in the company at the end of the quarter. Mario Gabelli’s GAMCO Investors also initiated a $0.2 million position during the quarter.
How have insiders been trading Scholastic Corp (NASDAQ:SCHL)?
Insider buying is best served when the company in question has seen transactions within the past six months. Over the latest six-month time period, Scholastic Corp (NASDAQ:SCHL) has seen zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Scholastic Corp (NASDAQ:SCHL). These stocks are Pearson PLC (ADR) (NYSE:PSO), The McGraw-Hill Companies, Inc. (NYSE:MHP), Noah Education Holdings Ltd. (ADR) (NYSE:NED), Courier Corporation (NASDAQ:CRRC), and John Wiley & Sons Inc (NYSE:JW-A). This group of stocks are in the publishing – books industry and their market caps are closest to SCHL’s market cap.
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| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Pearson PLC (ADR) (NYSE:PSO) | 5 | 0 | 0 |
| The McGraw-Hill Companies, Inc. (NYSE:MHP) | 31 | 0 | 0 |
| Noah Education Holdings Ltd. (ADR) (NYSE:NED) | 1 | 0 | 0 |
| Courier Corporation (NASDAQ:CRRC) | 6 | 0 | 0 |
| John Wiley & Sons Inc (NYSE:JW-A) | 0 | 0 |
With the results demonstrated by the aforementioned strategies, retail investors must always pay attention to hedge fund and insider trading sentiment, and Scholastic Corp (NASDAQ:SCHL) is no exception.
