Should You Buy BHP Billiton Limited (ADR) (BHP)?

As industrywide interest jumped, key money managers were leading the bulls’ herd. Manikay Partners, managed by Shane Finemore, initiated the most valuable position in BHP Billiton Limited (ADR) (NYSE:BHP). Manikay Partners had $10.9 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $9 million investment in the stock during the quarter. The other funds with brand new BHP positions are Michael Platt and William Reeves’s BlueCrest Capital Mgmt., Larry Foley and Paul Farrell’s Bronson Point Partners, and Bart Baum’s Ionic Capital Management.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as BHP Billiton Limited (ADR) (NYSE:BHP) but similarly valued. We will take a look at Time Warner Cable Inc (NYSE:TWC), Occidental Petroleum Corporation (NYSE:OXY), Enterprise Products Partners L.P. (NYSE:EPD), and Duke Energy Corp (NYSE:DUK). This group of stocks’ market caps are closest to BHP’s market cap.

As you can see these stocks had an average of 49 hedge funds with bullish positions and the average amount invested in these stocks was $4.60 billion, compared to just $132 million in BHP’s case. Time Warner Cable Inc (NYSE:TWC) is the most popular stock in this table, while Enterprise Products Partners L.P. (NYSE:EPD) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks BHP Billiton Limited (ADR) (NYSE:BHP) is even less popular than EPD. Considering that hedge funds aren’t fond of this stock in relation to other companies mentioned 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. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.