Is Markwest Energy Partners LP (NYSE:MWE) a buy, sell, or hold? Investors who are in the know are becoming more confident. The number of bullish hedge fund positions moved up by 1 lately.
In today’s marketplace, there are tons of metrics shareholders can use to watch their holdings. Two of the best are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the elite money managers can outpace their index-focused peers by a solid amount (see just how much).
Just as integral, optimistic insider trading activity is a second way to break down the world of equities. Obviously, there are a number of reasons for an insider to sell shares of his or her company, but just one, very clear reason why they would buy. Plenty of academic studies have demonstrated the market-beating potential of this tactic if shareholders understand what to do (learn more here).
Keeping this in mind, let’s take a look at the key action surrounding Markwest Energy Partners LP (NYSE:MWE).
How have hedgies been trading Markwest Energy Partners LP (NYSE:MWE)?
At year’s end, a total of 5 of the hedge funds we track were long in this stock, a change of 25% from the previous quarter. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were upping their holdings substantially.
When looking at the hedgies we track, Dmitry Balyasny’s Balyasny Asset Management had the biggest position in Markwest Energy Partners LP (NYSE:MWE), worth close to $51 million, comprising 1.4% of its total 13F portfolio. Sitting at the No. 2 spot is Alec Litowitz and Ross Laser of Magnetar Capital, with a $46 million position; 0.4% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include Richard Driehaus’s Driehaus Capital, and Cliff Asness’s AQR Capital Management.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Driehaus Capital, managed by Richard Driehaus, created the most outsized position in Markwest Energy Partners LP (NYSE:MWE). Driehaus Capital had 10 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0 million investment in the stock during the quarter.
What do corporate executives and insiders think about Markwest Energy Partners LP (NYSE:MWE)?
Insider buying is most useful when the company in question has experienced transactions within the past half-year. Over the latest six-month time frame, Markwest Energy Partners LP (NYSE:MWE) has seen 2 unique insiders purchasing, and 4 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Markwest Energy Partners LP (NYSE:MWE). These stocks are Helmerich & Payne, Inc. (NYSE:HP), Cheniere Energy, Inc. (NYSEAMEX:LNG), Concho Resources Inc. (NYSE:CXO), Diamond Offshore Drilling Inc (NYSE:DO), and Noble Corporation (NYSE:NE). This group of stocks belong to the oil & gas drilling & exploration industry and their market caps resemble MWE’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Helmerich & Payne, Inc. (NYSE:HP)||26||1||2|
|Cheniere Energy, Inc. (NYSEAMEX:LNG)||31||0||13|
|Concho Resources Inc. (NYSE:CXO)||25||0||4|
|Diamond Offshore Drilling Inc (NYSE:DO)||13||0||0|
|Noble Corporation (NYSE:NE)||31||0||0|
With the returns shown by our tactics, everyday investors should always pay attention to hedge fund and insider trading activity, and Markwest Energy Partners LP (NYSE:MWE) applies perfectly to this mantra.
Insider Monkey’s small-cap strategy returned 37% between September 2012 and March 2013 versus 12.9% for the S&P 500 index. Try it now by clicking the link above.