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The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 866 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st. In this article we look at what those investors think of Phillips 66 Partners LP (NYSE:PSXP).
Is Phillips 66 Partners LP (NYSE:PSXP) a buy here? Money managers were in a bullish mood. The number of bullish hedge fund positions improved by 1 in recent months. Phillips 66 Partners LP (NYSE:PSXP) was in 5 hedge funds' portfolios at the end of March. The all time high for this statistic is 8. Our calculations also showed that PSXP isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In today’s marketplace there are a large number of tools investors put to use to assess stocks. Some of the most underrated tools are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the best picks of the top investment managers can outperform the S&P 500 by a very impressive amount (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Stuart Zimmer of Zimmer Partners
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. Now we're going to view the fresh hedge fund action encompassing Phillips 66 Partners LP (NYSE:PSXP).
Do Hedge Funds Think PSXP Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from one quarter earlier. By comparison, 5 hedge funds held shares or bullish call options in PSXP a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Stuart J. Zimmer's Zimmer Partners has the largest position in Phillips 66 Partners LP (NYSE:PSXP), worth close to $28.5 million, comprising 0.4% of its total 13F portfolio. The second most bullish fund manager is Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $12.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism comprise Matthew Hulsizer's PEAK6 Capital Management, Ken Griffin's Citadel Investment Group and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position Heronetta Management allocated the biggest weight to Phillips 66 Partners LP (NYSE:PSXP), around 0.54% of its 13F portfolio. Zimmer Partners is also relatively very bullish on the stock, setting aside 0.39 percent of its 13F equity portfolio to PSXP.
As aggregate interest increased, key money managers were breaking ground themselves. PEAK6 Capital Management, managed by Matthew Hulsizer, initiated the largest call position in Phillips 66 Partners LP (NYSE:PSXP). PEAK6 Capital Management had $4.2 million invested in the company at the end of the quarter. Ken Griffin's Citadel Investment Group also initiated a $3.6 million position during the quarter. The only other fund with a brand new PSXP position is Frederick DiSanto's Ancora Advisors.
Let's now review hedge fund activity in other stocks similar to Phillips 66 Partners LP (NYSE:PSXP). These stocks are Proofpoint Inc (NASDAQ:PFPT), OneMain Holdings Inc (NYSE:OMF), Mobile TeleSystems Public Joint Stock Company (NYSE:MBT), Bumble Inc. (NASDAQ:BMBL), Digital Turbine Inc (NASDAQ:APPS), Freshpet Inc (NASDAQ:FRPT), and Marriott Vacations Worldwide Corporation (NYSE:VAC). This group of stocks' market values are similar to PSXP's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PFPT,22,455170,-4 OMF,43,886893,13 MBT,11,295926,-2 BMBL,29,545734,29 APPS,22,348515,-1 FRPT,19,209522,-6 VAC,24,604062,3 Average,24.3,477975,4.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.3 hedge funds with bullish positions and the average amount invested in these stocks was $478 million. That figure was $45 million in PSXP's case. OneMain Holdings Inc (NYSE:OMF) is the most popular stock in this table. On the other hand Mobile TeleSystems Public Joint Stock Company (NYSE:MBT) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Phillips 66 Partners LP (NYSE:PSXP) is even less popular than MBT. Our overall hedge fund sentiment score for PSXP is 24.8. 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. Hedge funds clearly dropped the ball on PSXP as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. 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 PSXP as the stock returned 26.7% since Q1 (through June 18th) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.