Is Universal Technical Institute, Inc. (UTI) Going to Burn These Hedge Funds?

Universal Technical Institute, Inc. (NYSE:UTI) has seen a decrease in hedge fund sentiment recently.

If you’d ask most traders, hedge funds are perceived as worthless, outdated investment tools of yesteryear. While there are more than 8000 funds in operation today, we at Insider Monkey choose to focus on the top tier of this club, around 450 funds. It is widely believed that this group controls most of the smart money’s total capital, and by tracking their highest performing stock picks, we have come up with a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outclassed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Equally as important, bullish insider trading sentiment is a second way to break down the investments you’re interested in. Just as you’d expect, there are many stimuli for an executive to downsize shares of his or her company, but only one, very clear reason why they would behave bullishly. Plenty of academic studies have demonstrated the useful potential of this method if “monkeys” understand what to do (learn more here).

Consequently, it’s important to take a peek at the latest action regarding Universal Technical Institute, Inc. (NYSE:UTI).

What have hedge funds been doing with Universal Technical Institute, Inc. (NYSE:UTI)?

At Q1’s end, a total of 5 of the hedge funds we track held long positions in this stock, a change of -50% from one quarter earlier. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were upping their stakes considerably.

According to our comprehensive database, Stadium Capital Management, managed by Alexander Medina Seaver, holds the most valuable position in Universal Technical Institute, Inc. (NYSE:UTI). Stadium Capital Management has a $45.6 million position in the stock, comprising 10.2% of its 13F portfolio. On Stadium Capital Management’s heels is Chuck Royce of Royce & Associates, with a $32.2 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining hedgies with similar optimism include Jim Simons’s Renaissance Technologies, Mario Gabelli’s GAMCO Investors and D. E. Shaw’s D E Shaw.

Since Universal Technical Institute, Inc. (NYSE:UTI) has faced declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there exists a select few fund managers that slashed their full holdings last quarter. Intriguingly, Ken Griffin’s Citadel Investment Group dumped the largest investment of the 450+ funds we track, comprising about $0.9 million in stock.. Joel Greenblatt’s fund, Gotham Asset Management, also sold off its stock, about $0.5 million worth. These transactions are important to note, as total hedge fund interest dropped by 5 funds last quarter.

Insider trading activity in Universal Technical Institute, Inc. (NYSE:UTI)

Insider buying is best served when the company in focus has seen transactions within the past six months. Over the latest six-month time frame, Universal Technical Institute, Inc. (NYSE:UTI) has experienced 1 unique insiders buying, and 3 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Universal Technical Institute, Inc. (NYSE:UTI). These stocks are Education Management Corp (NASDAQ:EDMC), GP Strategies Corporation (NYSE:GPX), Capella Education Company (NASDAQ:CPLA), Franklin Covey Co. (NYSE:FC), and ITT Educational Services, Inc. (NYSE:ESI). This group of stocks belong to the education & training services industry and their market caps are similar to UTI’s market cap.