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After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of March 31st. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards BP Midstream Partners LP (NYSE:BPMP).
Is BP Midstream Partners LP (NYSE:BPMP) a splendid investment today? Investors who are in the know were getting less optimistic. The number of bullish hedge fund positions went down by 1 in recent months. BP Midstream Partners LP (NYSE:BPMP) was in 5 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 6. Our calculations also showed that BPMP isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can't expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.
Matthew Hulsizer of PEAK6 Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $23 biotech stock and is trying to buy the rest for around $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. Keeping this in mind let's analyze the latest hedge fund action regarding BP Midstream Partners LP (NYSE:BPMP).
Do Hedge Funds Think BPMP Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of -17% from the previous quarter. On the other hand, there were a total of 5 hedge funds with a bullish position in BPMP a year ago. With hedge funds' capital changing hands, there exists an "upper tier" of key hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
Among these funds, Springhouse Capital Management held the most valuable stake in BP Midstream Partners LP (NYSE:BPMP), which was worth $6.4 million at the end of the fourth quarter. On the second spot was Arrowstreet Capital which amassed $2.1 million worth of shares. Heronetta Management, First Pacific Advisors LLC, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Springhouse Capital Management allocated the biggest weight to BP Midstream Partners LP (NYSE:BPMP), around 6.4% of its 13F portfolio. Heronetta Management is also relatively very bullish on the stock, earmarking 1.35 percent of its 13F equity portfolio to BPMP.
Since BP Midstream Partners LP (NYSE:BPMP) has witnessed bearish sentiment from the smart money, it's easy to see that there exists a select few money managers that slashed their full holdings in the first quarter. At the top of the heap, Paul Marshall and Ian Wace's Marshall Wace LLP cut the biggest stake of the 750 funds followed by Insider Monkey, comprising an estimated $0.8 million in stock, and Ken Griffin's Citadel Investment Group was right behind this move, as the fund cut about $0.5 million worth. These moves are important to note, as total hedge fund interest dropped by 1 funds in the first quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as BP Midstream Partners LP (NYSE:BPMP) but similarly valued. These stocks are Golden Ocean Group Ltd (NASDAQ:GOGL), S & T Bancorp Inc (NASDAQ:STBA), Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB), The Shyft Group, Inc. (NASDAQ:SHYF), istar Inc (NYSE:STAR), US Ecology Inc. (NASDAQ:ECOL), and Noble Midstream Partners LP (NYSE:NBLX). All of these stocks' market caps resemble BPMP's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GOGL,11,62138,5 STBA,2,1309,1 YMAB,13,80561,3 SHYF,13,125411,2 STAR,22,181693,6 ECOL,6,17512,-2 NBLX,1,263,-2 Average,9.7,66984,1.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.7 hedge funds with bullish positions and the average amount invested in these stocks was $67 million. That figure was $11 million in BPMP's case. istar Inc (NYSE:STAR) is the most popular stock in this table. On the other hand Noble Midstream Partners LP (NYSE:NBLX) is the least popular one with only 1 bullish hedge fund positions. BP Midstream Partners LP (NYSE:BPMP) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BPMP is 38.5. 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. 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 17.4% in 2021 through June 18th and still beat the market by 6.1 percentage points. A small number of hedge funds were also right about betting on BPMP as the stock returned 19.8% since the end of the first quarter (through 6/18) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.