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Is Golar LNG Partners LP (GMLP) A Good Stock To Buy?

While the market driven by short-term sentiment influenced by uncertainty regarding the future of the interest rate environment in the US, the low commodity prices and the economic turmoil in China, many smart money investors are keeping their optimism regarding the current bull run, while still hedging many of their long positions. However, as we know, big investors usually buy stocks with strong fundamentals, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Golar LNG Partners LP (NASDAQ:GMLP).

Golar LNG Partners LP (NASDAQ:GMLP) investors should be aware of a decrease in support from the world’s most elite money managers in recent months. At the end of this article we will also compare GMLP to other stocks including Rouse Properties Inc (NYSE:RSE), Babcock & Wilcox Enterprises Inc (NYSE:BW), and Starwood Waypoint Residential Trust (NYSE:SWAY) to get a better sense of its popularity.

In today’s marketplace there are several methods market participants put to use to appraise publicly traded companies. A couple of the best methods are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the top picks of the top fund managers can outclass their index-focused peers by a superb margin (see the details here).

With all of this in mind, let’s analyze the fresh action encompassing Golar LNG Partners LP (NASDAQ:GMLP).

What does the smart money think about Golar LNG Partners LP (NASDAQ:GMLP)?

At the end of the third quarter, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of -43% from the previous quarter. With hedge funds’ capital changing hands, there exist a few key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Huber Capital Management, managed by Joe Huber, holds the most valuable position in Golar LNG Partners LP (NASDAQ:GMLP). Huber Capital Management has an $23.6 million position in the stock, comprising 0.8% of its 13F portfolio. Coming in second is Renaissance Technologies, led by Jim Simons, holding an $1.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism encompass Israel Englander’s Millennium Management, Ken Griffin’s Citadel Investment Group and Ken Griffin’s Citadel Investment Group.

Seeing as Golar LNG Partners LP (NASDAQ:GMLP) has witnessed declining sentiment from the smart money, logic holds that there is a sect of fund managers who sold off their entire stakes by the end of the third quarter. It’s worth mentioning that Jonathan Barrett and Paul Segal’s Luminus Management dumped the biggest stake of all the hedgies monitored by Insider Monkey, worth close to $1.9 million in stock, and George Hall’s Clinton Group was right behind this move, as the fund dropped about $0.4 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 3 funds by the end of the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Golar LNG Partners LP (NASDAQ:GMLP). These stocks are Rouse Properties Inc (NYSE:RSE), Babcock & Wilcox Enterprises Inc (NYSE:BW), Starwood Waypoint Residential Trust (NYSE:SWAY), and Solaredge Technologies Inc (NASDAQ:SEDG). This group of stocks’ market caps are closest to GMLP’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
RSE 11 90110 -1
BW 19 322843 14
SWAY 22 296924 5
SEDG 16 54910 -1

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $191 million. That figure was $27 million in GMLP’s case. Starwood Waypoint Residential Trust (NYSE:SWAY) is the most popular stock in this table. On the other hand, Rouse Properties Inc (NYSE:RSE) is the least popular one. In comparison, Golar LNG Partners LP (NASDAQ:GMLP), with 4 bullish hedge fund positions, is even less popular than RSE. Further analyses are necessary to comprehend why smart money isn’t behind this stock. It is possible that investors may not be familiar with the bullish thesis, so that they find the stock overvalued. In any case, more research is advisable.

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