Is Genesis Energy, L.P. (GEL) A Good Stock To Buy?

Due to the fact that Genesis Energy, L.P. (NYSE:GEL) has experienced a declination in interest from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of money managers that elected to cut their positions entirely last quarter. Intriguingly, Dmitry Balyasny’s Balyasny Asset Management sold off the biggest investment of all the hedgies watched by Insider Monkey, valued at an estimated $4 million in stock, and Jim Simons’ Renaissance Technologies was right behind this move, as the fund sold off about $2.9 million worth of shares. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Genesis Energy, L.P. (NYSE:GEL) but similarly valued. These stocks are Graphic Packaging Holding Company (NYSE:GPK), Navient Corp (NASDAQ:NAVI), Taubman Centers, Inc. (NYSE:TCO), and Douglas Emmett, Inc. (NYSE:DEI). This group of stocks’ market valuations match GEL’s market valuation.

As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $609 million, compared to just $30 million in GEL’s case. Graphic Packaging Holding Company (NYSE:GPK) is the most popular stock in this table, while Douglas Emmett, Inc. (NYSE:DEI) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Genesis Energy, L.P. (NYSE:GEL) is even less popular than DEI. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed 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.