Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 817 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Blueknight Energy Partners L.P. (NASDAQ:BKEP).
Blueknight Energy Partners L.P. (NASDAQ:BKEP) has experienced an increase in hedge fund interest of late. Blueknight Energy Partners L.P. (NASDAQ:BKEP) was in 3 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 3. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BKEP isn't among the 30 most popular stocks among hedge funds (click for Q3 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.
Today there are a lot of tools market participants use to analyze their holdings. A pair of the less utilized tools are hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the top investment managers can outpace the market by a healthy margin (see the details here).
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. 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. With all of this in mind let's analyze the recent hedge fund action regarding Blueknight Energy Partners L.P. (NASDAQ:BKEP).
Hedge fund activity in Blueknight Energy Partners L.P. (NASDAQ:BKEP)
At third quarter's end, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from the previous quarter. The graph below displays the number of hedge funds with bullish position in BKEP over the last 21 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, DG Capital Management, managed by Dov Gertzulin, holds the number one position in Blueknight Energy Partners L.P. (NASDAQ:BKEP). DG Capital Management has a $4.1 million position in the stock, comprising 2.4% of its 13F portfolio. The second most bullish fund manager is Stephen C. Freidheim of Cyrus Capital Partners, with a $1.1 million position; the fund has 0.3% of its 13F portfolio invested in the stock. In terms of the portfolio weights assigned to each position DG Capital Management allocated the biggest weight to Blueknight Energy Partners L.P. (NASDAQ:BKEP), around 2.45% of its 13F portfolio. Cyrus Capital Partners is also relatively very bullish on the stock, setting aside 0.27 percent of its 13F equity portfolio to BKEP.
Consequently, specific money managers were leading the bulls' herd. Invenomic Capital Management, managed by Ali Motamed, assembled the largest position in Blueknight Energy Partners L.P. (NASDAQ:BKEP). Invenomic Capital Management had $0.4 million invested in the company at the end of the quarter.
Let's check out hedge fund activity in other stocks similar to Blueknight Energy Partners L.P. (NASDAQ:BKEP). These stocks are Aridis Pharmaceuticals Inc. (NASDAQ:ARDS), Daxor Corporation (NYSE:DXR), OFS Capital Corp (NASDAQ:OFS), Aerpio Pharmaceuticals, Inc. (NASDAQ:ARPO), Marathon Patent Group, Inc. (NASDAQ:MARA), Curis, Inc. (NASDAQ:CRIS), and Kingstone Companies Inc (NASDAQ:KINS). This group of stocks' market valuations are closest to BKEP's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ARDS,1,80,0 DXR,2,2393,1 OFS,2,252,-1 ARPO,8,19844,6 MARA,3,781,2 CRIS,10,16406,2 KINS,2,2874,-2 Average,4,6090,1.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 4 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $6 million in BKEP's case. Curis, Inc. (NASDAQ:CRIS) is the most popular stock in this table. On the other hand Aridis Pharmaceuticals Inc. (NASDAQ:ARDS) is the least popular one with only 1 bullish hedge fund positions. Blueknight Energy Partners L.P. (NASDAQ:BKEP) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BKEP is 47.1. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 28.1% in 2020 through November 23rd and still beat the market by 15.4 percentage points. A small number of hedge funds were also right about betting on BKEP as the stock returned 8.3% since the end of the third quarter (through 11/23) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.