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Hedge Funds Have Never Been This Bullish On Brookfield Infrastructure Partners L.P. (BIP)

We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Brookfield Infrastructure Partners L.P. (NYSE:BIP) based on that data.

Brookfield Infrastructure Partners L.P. (NYSE:BIP) has seen an increase in support from the world’s most elite money managers recently. Our calculations also showed that BIP isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

According to most stock holders, hedge funds are viewed as slow, outdated financial vehicles of years past. While there are more than 8000 funds with their doors open at the moment, Our experts hone in on the aristocrats of this club, around 850 funds. These money managers direct the majority of the smart money’s total asset base, and by tailing their matchless picks, Insider Monkey has found numerous investment strategies that have historically outstripped Mr. Market. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

Blair Levinsky of Waratah Capital Advisors

Blair Levinsky of Waratah Capital Advisors

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, We take a look at lists like the 10 stocks that went up during the 2008 crash to identify the companies that are likely to deliver double digit returns in up and down markets. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now let’s review the latest hedge fund action regarding Brookfield Infrastructure Partners L.P. (NYSE:BIP).

How have hedgies been trading Brookfield Infrastructure Partners L.P. (NYSE:BIP)?

At the end of the first quarter, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of 27% from one quarter earlier. On the other hand, there were a total of 7 hedge funds with a bullish position in BIP a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Brookfield Infrastructure Partners L.P. (NYSE:BIP) was held by Select Equity Group, which reported holding $33.6 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $5.2 million position. Other investors bullish on the company included Select Equity Group, Driehaus Capital, and Renaissance Technologies. In terms of the portfolio weights assigned to each position One68 Global Capital allocated the biggest weight to Brookfield Infrastructure Partners L.P. (NYSE:BIP), around 3.64% of its 13F portfolio. Lucas Capital Management is also relatively very bullish on the stock, earmarking 2.69 percent of its 13F equity portfolio to BIP.

With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Select Equity Group, managed by Robert Joseph Caruso, initiated the most outsized position in Brookfield Infrastructure Partners L.P. (NYSE:BIP). Select Equity Group had $3.4 million invested in the company at the end of the quarter. Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors also made a $1.6 million investment in the stock during the quarter. The following funds were also among the new BIP investors: Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Paul Marshall and Ian Wace’s Marshall Wace LLP, and David Nguyen and Nancy Oh’s One68 Global Capital.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Brookfield Infrastructure Partners L.P. (NYSE:BIP) but similarly valued. These stocks are Jacobs Engineering Group Inc. (NYSE:J), KB Financial Group, Inc. (NYSE:KB), IDEX Corporation (NYSE:IEX), and Roku, Inc. (NASDAQ:ROKU). This group of stocks’ market caps are similar to BIP’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
J 28 995596 -7
KB 7 37837 2
IEX 33 535440 10
ROKU 35 182267 1
Average 25.75 437785 1.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 25.75 hedge funds with bullish positions and the average amount invested in these stocks was $438 million. That figure was $56 million in BIP’s case. Roku, Inc. (NASDAQ:ROKU) is the most popular stock in this table. On the other hand KB Financial Group, Inc. (NYSE:KB) is the least popular one with only 7 bullish hedge fund positions. Brookfield Infrastructure Partners L.P. (NYSE:BIP) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.3% in 2020 through June 25th and surpassed the market by 16.8 percentage points. Unfortunately BIP wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); BIP investors were disappointed as the stock returned 16.7% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

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