Hedge funds and other investment firms that we track manage billions of dollars of their wealthy clients’ money, and needless to say, they are painstakingly thorough when analyzing where to invest this money, as their own wealth depends on it. Regardless of the various methods used by successful investors like David Tepper and Dan Loeb, the resources they expend are second-to-none. This is especially valuable when it comes to small-cap stocks, which is where they generate their strongest outperformance, as their resources give them a huge edge when it comes to studying these stocks compared to the average investor, which is why we intently follow their activity in the small-cap space.
In this article, we’ll see whether Genesis Energy, L.P. (NYSE:GEL) represents a good investment, based on its popularity among hedge fund investors. Overall, the sentiment towards the stock among investors in our database remained flat during the third quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Match Group Inc(NASDAQ:MTCH), Cullen/Frost Bankers, Inc. (NYSE:CFR), and Orbital ATK Inc (NYSE:OA) to gather more data points.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
Now, let’s take a look at the latest action regarding Genesis Energy, L.P. (NYSE:GEL).
Hedge fund activity in Genesis Energy, L.P. (NYSE:GEL)
At the end of the third quarter, a total of seven of the hedge funds tracked by Insider Monkey held long positions in Genesis Energy, unchanged from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards GEL over the last five quarters. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Bernard Selz’s Selz Capital holds the number one position in Genesis Energy, L.P. (NYSE:GEL). Selz Capital has a $13.5 million position in the stock, comprising 3.1% of its 13F portfolio. Sitting at the No. 2 spot is Jim Simons’ Renaissance Technologies, with a $2.8 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism comprise Robert B. Gillam’s McKinley Capital Management, Israel Englander’s Millennium Management, and Ken Griffin’s Citadel Investment Group. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.