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Is Enbridge Energy Management, L.L.C. (EEQ) Going to Burn These Hedge Funds?

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Is Enbridge Energy Management, L.L.C. (NYSE:EEQ) the right investment to pursue these days? Prominent investors are buying. The number of bullish hedge fund positions advanced by 1 in recent months.

According to most shareholders, hedge funds are seen as underperforming, outdated investment tools of yesteryear. While there are over 8000 funds in operation at present, we at Insider Monkey hone in on the aristocrats of this group, about 450 funds. Most estimates calculate that this group controls the majority of the smart money’s total capital, and by paying attention to their highest performing equity investments, we have revealed a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).

Equally as integral, optimistic insider trading sentiment is a second way to parse down the world of equities. Just as you’d expect, there are a variety of motivations for a corporate insider to drop shares of his or her company, but just one, very obvious reason why they would buy. Several academic studies have demonstrated the market-beating potential of this method if you know where to look (learn more here).

Consequently, it’s important to take a gander at the key action encompassing Enbridge Energy Management, L.L.C. (NYSE:EEQ).

Hedge fund activity in Enbridge Energy Management, L.L.C. (NYSE:EEQ)

At Q1’s end, a total of 6 of the hedge funds we track were bullish in this stock, a change of 20% from the first quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their holdings meaningfully.

Of the funds we track, D E Shaw, managed by D. E. Shaw, holds the biggest position in Enbridge Energy Management, L.L.C. (NYSE:EEQ). D E Shaw has a $13.3 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Jim Simons of Renaissance Technologies, with a $7.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other peers that are bullish include Ken Griffin’s Citadel Investment Group, Israel Englander’s Millennium Management and David Costen Haley’s HBK Investments.

With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. HBK Investments, managed by David Costen Haley, assembled the largest position in Enbridge Energy Management, L.L.C. (NYSE:EEQ). HBK Investments had 0.3 million invested in the company at the end of the quarter.

How are insiders trading Enbridge Energy Management, L.L.C. (NYSE:EEQ)?

Insider buying is most useful when the company we’re looking at has experienced transactions within the past six months. Over the latest half-year time period, Enbridge Energy Management, L.L.C. (NYSE:EEQ) has experienced 3 unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Enbridge Energy Management, L.L.C. (NYSE:EEQ). These stocks are Crosstex Energy, L.P. (NASDAQ:XTEX), PDC Energy Inc (NASDAQ:PDCE), Bonanza Creek Energy Inc (NYSE:BCEI), EXCO Resources Inc (NYSE:XCO), and Gran Tierra Energy Inc. (NYSEAMEX:GTE). This group of stocks are the members of the independent oil & gas industry and their market caps resemble EEQ’s market cap.

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