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Elite Investors Staying Away From EQT GP Holdings LP (EQGP)

You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really difficult for individual investors to make a proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.

EQT GP Holdings LP (NYSE:EQGP) has seen an increase in hedge fund interest lately, though overall ownership remains low at just five funds. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article, we will examine companies such as American Financial Group (NYSE:AFG), W.P. Carey Inc. REIT (NYSE:WPC), and Toll Brothers Inc (NYSE:TOL) to gather more data points.

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In the eyes of most market participants, hedge funds are seen as underperforming, old investment tools of the past. While there are greater than 8,000 funds in operation at present, we hone in on the bigwigs of this club, approximately 700 funds. These hedge fund managers have their hands on the lion’s share of the smart money’s total asset base, and by watching their matchless equity investments, Insider Monkey has formulated a few investment strategies that have historically exceeded the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy outrun the S&P 500 index by 12 percentage points per year for a decade in their back tests.

Keeping this in mind, we’re going to take a look at the recent action regarding EQT GP Holdings LP (NYSE:EQGP).

What does the smart money think about EQT GP Holdings LP (NYSE:EQGP)?

At the end of the third quarter, a total of five of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 25% from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Zimmer Partners, managed by Stuart J. Zimmer, holds the largest position in EQT GP Holdings LP (NYSE:EQGP). Zimmer Partners has a $14.3 million position in the stock, comprising 1.1% of its 13F portfolio. Coming in second is Green Arrow Capital Management, led by Millennium Management Subsidiary, holding a $2.5 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Remaining hedgies that hold long positions contain Renaissance Technologies, and Ken Griffin’s Citadel Investment Group.

As industrywide interest jumped, specific money managers were breaking ground themselves. Renaissance Technologies created the biggest position in EQT GP Holdings LP (NYSE:EQGP). Renaissance Technologies had $1.1 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also initiated a $0.9 million position during the quarter. The other fund with a new position in the stock is Citadel Investment Group.

Let’s now take a look at hedge fund activity in other stocks similar to EQT GP Holdings LP (NYSE:EQGP). We will take a look at American Financial Group (NYSE:AFG), W.P. Carey Inc. REIT (NYSE:WPC), Toll Brothers Inc (NYSE:TOL), and Cadence Design Systems Inc (NASDAQ:CDNS). This group of stocks’ market caps resemble EQT GP Holdings LP (NYSE:EQGP)’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AFG 19 139146 -2
WPC 11 108928 -1
TOL 34 646135 1
CDNS 28 1483917 -3

As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $595 million. That figure was a mere $19 millions in EQT GP Holdings LP (NYSE:EQGP)’s case. Toll Brothers Inc (NYSE:TOL) is the most popular stock in this table. On the other hand, W.P. Carey Inc. REIT (NYSE:WPC) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks EQT GP Holdings LP (NYSE:EQGP) is even less popular than W.P. Carey Inc. REIT (NYSE:WPC). Considering that hedge funds aren’t fond of this stock, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock.

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