Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we analyze Antero Midstream GP LP (NYSE:AMGP) from the perspective of those elite funds.
Antero Midstream GP LP (NYSE:AMGP) investors should pay attention to an increase in support from the world’s most elite money managers lately. AMGP was in 17 hedge funds’ portfolios at the end of September. There were 11 hedge funds in our database with AMGP positions at the end of the previous quarter. Our calculations also showed that AMGP isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to take a look at the key hedge fund action encompassing Antero Midstream GP LP (NYSE:AMGP).
How have hedgies been trading Antero Midstream GP LP (NYSE:AMGP)?
Heading into the fourth quarter of 2018, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 55% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards AMGP over the last 13 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, FPR Partners held the most valuable stake in Antero Midstream GP LP (NYSE:AMGP), which was worth $128.1 million at the end of the third quarter. On the second spot was Millennium Management which amassed $11 million worth of shares. Moreover, Pennant Capital Management, Point72 Asset Management, and Perella Weinberg Partners were also bullish on Antero Midstream GP LP (NYSE:AMGP), allocating a large percentage of their portfolios to this stock.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Point72 Asset Management, managed by Steve Cohen, assembled the biggest position in Antero Midstream GP LP (NYSE:AMGP). Point72 Asset Management had $6.1 million invested in the company at the end of the quarter. Mitch Cantor’s Mountain Lake Investment Management also initiated a $1.7 million position during the quarter. The following funds were also among the new AMGP investors: Matthew Hulsizer’s PEAK6 Capital Management, Ken Griffin’s Citadel Investment Group, and Dmitry Balyasny’s Balyasny Asset Management.
Let’s now review hedge fund activity in other stocks similar to Antero Midstream GP LP (NYSE:AMGP). These stocks are Companhia Siderurgica Nacional (NYSE:SID), Canada Goose Holdings Inc. (NYSE:GOOS), PNM Resources, Inc. (NYSE:PNM), and CVB Financial Corp. (NASDAQ:CVBF). This group of stocks’ market caps are similar to AMGP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SID | 7 | 2815 | 0 |
| GOOS | 18 | 147533 | -8 |
| PNM | 19 | 264822 | 6 |
| CVBF | 11 | 46106 | 5 |
| Average | 13.75 | 115319 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $115 million. That figure was $172 million in AMGP’s case. PNM Resources, Inc. (NYSE:PNM) is the most popular stock in this table. On the other hand Companhia Siderurgica Nacional (NYSE:SID) is the least popular one with only 7 bullish hedge fund positions. Antero Midstream GP LP (NYSE:AMGP) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard PNM might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.