Do Hedge Funds Love BP plc (BP)?

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is BP plc (NYSE:BP), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

BP plc (NYSE:BP) has experienced an increase in hedge fund sentiment of late. BP plc (NYSE:BP) was in 30 hedge funds’ portfolios at the end of June. The all time high for this statistic is 40. There were 29 hedge funds in our database with BP holdings at the end of March. Our calculations also showed that BP isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

If you’d ask most investors, hedge funds are assumed to be slow, old investment tools of the past. While there are over 8000 funds with their doors open at present, Our researchers hone in on the leaders of this group, approximately 850 funds. Most estimates calculate that this group of people command bulk of all hedge funds’ total asset base, and by monitoring their finest equity investments, Insider Monkey has spotted various investment strategies that have historically beaten Mr. Market. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to view the fresh hedge fund action surrounding BP plc (NYSE:BP).

Do Hedge Funds Think BP Is A Good Stock To Buy Now?

At the end of June, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 3% from the previous quarter. On the other hand, there were a total of 27 hedge funds with a bullish position in BP a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in BP plc (NYSE:BP) was held by Fisher Asset Management, which reported holding $317.5 million worth of stock at the end of June. It was followed by Citadel Investment Group with a $138.6 million position. Other investors bullish on the company included Orbis Investment Management, Two Sigma Advisors, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Kahn Brothers allocated the biggest weight to BP plc (NYSE:BP), around 8.19% of its 13F portfolio. Stamos Capital is also relatively very bullish on the stock, earmarking 3.19 percent of its 13F equity portfolio to BP.

As industrywide interest jumped, some big names were breaking ground themselves. Paulson & Co, managed by John Paulson, established the largest position in BP plc (NYSE:BP). Paulson & Co had $51.3 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also made a $17.2 million investment in the stock during the quarter. The other funds with brand new BP positions are Till Bechtolsheimer’s Arosa Capital Management, Joe DiMenna’s ZWEIG DIMENNA PARTNERS, and Tony Davis’s Inherent Group.

Let’s now take a look at hedge fund activity in other stocks similar to BP plc (NYSE:BP). We will take a look at Zoetis Inc (NYSE:ZTS), Prologis Inc (NYSE:PLD), Altria Group Inc (NYSE:MO), Fidelity National Information Services Inc. (NYSE:FIS), Mondelez International Inc (NASDAQ:MDLZ), NIO Inc. (NYSE:NIO), and Gilead Sciences, Inc. (NASDAQ:GILD). This group of stocks’ market caps are similar to BP’s market cap.

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As you can see these stocks had an average of 51.1 hedge funds with bullish positions and the average amount invested in these stocks was $2619 million. That figure was $1081 million in BP’s case. Fidelity National Information Services Inc. (NYSE:FIS) is the most popular stock in this table. On the other hand NIO Inc. (NYSE:NIO) is the least popular one with only 34 bullish hedge fund positions. Compared to these stocks BP plc (NYSE:BP) is even less popular than NIO. Our overall hedge fund sentiment score for BP is 28.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Hedge funds clearly dropped the ball on BP as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. A small number of hedge funds were also right about betting on BP as the stock returned 14.7% since Q2 (through October 15th) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.