El Paso Pipeline Partners, L.P. (NYSE:EPB) investors should pay attention to a decrease in hedge fund sentiment in recent months.
To most shareholders, hedge funds are seen as unimportant, outdated financial vehicles of years past. While there are greater than 8000 funds with their doors open at present, we at Insider Monkey choose to focus on the aristocrats of this group, about 450 funds. It is estimated that this group controls most of the hedge fund industry's total asset base, and by tracking their best equity investments, we have found a few investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we've began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Equally as key, optimistic insider trading activity is a second way to break down the stock market universe. There are many stimuli for an upper level exec to cut shares of his or her company, but just one, very obvious reason why they would buy. Several empirical studies have demonstrated the useful potential of this tactic if "monkeys" know where to look (learn more here).
With these "truths" under our belt, it's important to take a look at the key action surrounding El Paso Pipeline Partners, L.P. (NYSE:EPB).
At Q1's end, a total of 6 of the hedge funds we track held long positions in this stock, a change of -25% from one quarter earlier. With hedgies' sentiment swirling, there exists a select group of key hedge fund managers who were increasing their holdings meaningfully.
According to our comprehensive database, Richard Driehaus's Driehaus Capital had the biggest position in El Paso Pipeline Partners, L.P. (NYSE:EPB), worth close to $3.7 million, comprising 0.2% of its total 13F portfolio. On Driehaus Capital's heels is PEAK6 Capital Management, managed by Matthew Hulsizer, which held a $2 million call position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other hedgies that are bullish include Andrew R. Midler's Savitr Capital, and Scott Scher & Michael Prober's Clovis Capital Management.
Judging by the fact that El Paso Pipeline Partners, L.P. (NYSE:EPB) has witnessed bearish sentiment from the smart money, logic holds that there is a sect of money managers that decided to sell off their entire stakes in Q1. It's worth mentioning that John Bader's Halcyon Asset Management said goodbye to the largest stake of the 450+ funds we watch, comprising close to $1.3 million in stock., and Jim Simons of Renaissance Technologies was right behind this move, as the fund said goodbye to about $1 million worth. These transactions are interesting, as total hedge fund interest dropped by 2 funds in Q1.
Insider trading activity, especially when it's bullish, is particularly usable when the company in question has seen transactions within the past half-year. Over the last 180-day time frame, El Paso Pipeline Partners, L.P. (NYSE:EPB) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).
Let's go over hedge fund and insider activity in other stocks similar to El Paso Pipeline Partners, L.P. (NYSE:EPB). These stocks are Oneok Partners LP (NYSE:OKS), Magellan Midstream Partners, L.P. (NYSE:MMP), Enbridge Energy Partners, L.P. (NYSE:EEP), Kinder Morgan Management, LLC (NYSE:KMR), and Pembina Pipeline Corp (NYSE:PBA). This group of stocks are the members of the oil & gas pipelines industry and their market caps are closest to EPB's market cap.