Is BP PLC (ADR) (BP) a Buy as It Rallies on Oil Spill Settlement News?

BP plc (ADR) (NYSE:BP) announced on Thursday that it will pay a settlement fee of $18.7 billion over the Deepwater Horizon Spill claims. BP plc said that it would pay the settlement amount over a period of 18 years and this would settle all the US federal and state claims from the oil spill accident in April 2010. According to the federal authorities this is their biggest settlement with a corporation. According to BP plc (ADR) (NYSE:BP) Chairman Carl-Henric Svanberg this agreement resolves the company’s long-running legal issues and gives clarity on costs and creates a certainty of payments for all concerned parties. BP plc (ADR) (NYSE:BP)’s stock has rallied soon after the news about oil spill settlement broke out and gained around 6%. What do hedge funds think about BP and is it a good buy at the moment?

Hedge funds seem to be not very bullish on BP plc (ADR) (NYSE:BP), as the number of hedge funds holding long positions reduced to 37 at the end of March, from 39 at the end of 2014, while the aggregate value capital held by these hedge funds went down by 6.5% to $1.18 billion at the end of the first trimester. Considering the fact that the stock has gained around 1.5% during the January – March period, we can say that the hedge funds were not favoring this stock during this period.

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