Were These Hedge Funds Wrong About Loading Up On TAL Education Group (TAL)?

Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks aren’t doing great but many of the stocks that delivered strong returns since March are still going very strong and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment to TAL Education Group (NYSE:TAL) changed recently.

TAL Education Group (NYSE:TAL) has experienced an increase in enthusiasm from smart money recently. TAL Education Group (NYSE:TAL) was in 40 hedge funds’ portfolios at the end of June. The all time high for this statistics is 38. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 38 hedge funds in our database with TAL holdings at the end of March. Our calculations also showed that TAL isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.

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 monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 56 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Rajiv Jain of GQG Partners
Rajiv Jain of GQG Partners

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. Keeping this in mind let’s take a look at the recent hedge fund action encompassing TAL Education Group (NYSE:TAL).

What does smart money think about TAL Education Group (NYSE:TAL)?

Heading into the third quarter of 2020, a total of

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Sadness greets USF decision to close education college. ‘It’s wrong.’

Cassie Mattison knew from an early age she was born to be a teacher.

a man and a woman standing in front of a cake: Cassie Mattison, center, won Hillsborough County's teacher of the year honors in 2013. Still teaching at Strawberry Crest High, she said she wouldn't have become a classroom educator without USF's undergraduate program.

© Times (2013)/Tampa Bay Times/TNS
Cassie Mattison, center, won Hillsborough County’s teacher of the year honors in 2013. Still teaching at Strawberry Crest High, she said she wouldn’t have become a classroom educator without USF’s undergraduate program.

“But if USF didn’t have a College of Ed, I would not be in a classroom, impacting thousands of lives over all these years,” said Mattison, Hillsborough County’s 2013 teacher of the year. “Countless former AP Literature students of mine are teachers now. One is even an assistant principal. They are all products of my classroom and the USF College of Ed. Never could I have imagined this domino effect.”

Mattison and many others like her expressed shock and dismay at the University of South Florida’s announcement this week that it would shutter the undergraduate degree program in the College of Education that has prepared thousands of teachers over the past six decades.

Even now, area school districts reported that between 30 percent and 40 percent of their faculty members had USF education degrees — more than any other institution. In Hillsborough County, for example, that translates to 3,692 teachers. In Pasco County’s teaching force, USF graduates number nearly 1,900.

The college’s enrollment shrank by nearly half over the past decade, though. Combined with budget woes brought on by the coronavirus pandemic, the odds did not play in the program’s favor.

Other area schools stand poised to take advantage of the position that USF ceded.

“We’re building our program,” said Colleen Beaudoin, education department chairwoman at the University of Tampa. “The timing is really good for us.”

Yet Beaudoin, a former high school teacher who serves on the Pasco County School Board, also lamented the USF decision.

“I’m disheartened for the profession,” she said.

That concern for the fate of teaching and public education in Florida came through loudly among the educators who remembered their own experiences at USF.

“I moved to the Tampa area to pursue my education at USF due to the high regard in which this program was held across the state,” Hillsborough County elementary teacher Lynn Delisle said via Facebook. “The decline in enrollment is not due to the quality of the USF program but rather the demise of the profession. No longer would I encourage anyone to go into education. It is a sad statement of our values as a nation.”

Another upset grad, Kelly Cassidy, left teaching to work for the family title business in Tampa, but says the lessons still resonate.

“It seems absurd to me that in a time where we were so quick to send kids back to school ‘because they need to learn and socialize,’ we are taking away the crucial programs that prepare teachers for these unprecedented times,” Cassidy said via email. “How are we to expect our children to be prepared for this world when we’re cutting key programs that prepare our teachers to teach them?

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