The elite funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small-cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small-cap stocks. In this article, we take a closer look at Cheniere Energy Partners LP (NYSEMKT:CQP) from the perspective of these elite funds.
Cheniere Energy Partners LP (NYSEMKT:CQP) has experienced an increase in activity from the world’s best hedge funds recently. CQP was in 8 hedge funds’ portfolios at the end of September. There were 7 hedge funds in our database with CQP positions at the end of the previous quarter. The value of their holdings also rose slightly during the third quarter, even as shares of the company declined by nearly 15%. However, those 8 funds still held just 0.30% of the public utilities company’s shares on September 30. At the end of this article we will also compare CQP to other stocks including Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP), Digital Realty Trust, Inc. (NYSE:DLR), and CNH Industrial NV (NYSE:CNHI) to get a better sense of its popularity.
Follow Cheniere Energy Partners L.p. (NYSEMKT:CQP)
Follow Cheniere Energy Partners L.p. (NYSEMKT:CQP)
Today there are plenty of tools stock traders have at their disposal to value their stock investments. Some of the most useful tools are hedge fund and insider trading interest. We have shown that, historically, those who follow the top picks of the best hedge fund managers can outclass the S&P 500 by a superb amount (see the details here).
Keeping this in mind, let’s analyze the key action regarding Cheniere Energy Partners LP (NYSEMKT:CQP).
What have hedge funds been doing with Cheniere Energy Partners LP (NYSEMKT:CQP)?
Heading into Q4, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 14% rise from the second quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were boosting their stakes substantially (or had already accumulated large positions).
According to Insider Monkey’s hedge fund database, Columbus Hill Capital Management, managed by Kevin D. Eng, holds the largest position in Cheniere Energy Partners LP (NYSEMKT:CQP). Columbus Hill Capital Management has a $15.8 million position in the stock, comprising 2.3% of its 13F portfolio. On Columbus Hill Capital Management’s heels is Cloud Gate Capital, managed by Brian Newman and David Heller, which holds a $7 million position; 3.5% of its 13F portfolio is allocated to the company. Other peers that are bullish consist of Curtis Schenker and Craig Effron’s Scoggin, Stuart J. Zimmer’s Zimmer Partners, and Matthew Hulsizer’s PEAK6 Capital Management.
As aggregate interest increased, key money managers were leading the bulls’ herd. Hurley Capital, managed by Charles Goldblum, assembled the biggest position in Cheniere Energy Partners LP (NYSEMKT:CQP). Hurley Capital had $5,000 invested in the company at the end of the quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Cheniere Energy Partners LP (NYSEMKT:CQP). These stocks are Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP), Digital Realty Trust, Inc. (NYSE:DLR), CNH Industrial NV (NYSE:CNHI), and Cincinnati Financial Corporation (NASDAQ:CINF). All of these stocks’ market caps resemble CQP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CTRP | 43 | 2075926 | -9 |
| DLR | 22 | 244974 | 8 |
| CNHI | 13 | 378744 | 4 |
| CINF | 23 | 652563 | 6 |
As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $838 million. That figure was $30 million in CQP’s case. Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) is the most popular stock in this table. On the other hand CNH Industrial NV (NYSE:CNHI) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Cheniere Energy Partners LP (NYSEMKT:CQP) is even less popular than CNHI and has a fraction of the capital invested in it that the other stocks do. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock.
