Is It Time To Buy BP plc (ADR) (BP)?

Due to the fact that BP plc (ADR) (NYSE:BP) has experienced falling interest from the entirety of the hedge funds we track, we can see that there were a few money managers that decided to sell off their entire stakes last quarter. Interestingly, Jonathon Jacobson’s Highfields Capital Management sold off the biggest stake of all the hedgies followed by Insider Monkey, comprising an estimated $88.8 million in stock, and Alan Fournier’s Pennant Capital Management was right behind this move, as the fund said goodbye to about $71 million worth of BP shares. These transactions are interesting, as aggregate hedge fund interest fell by 10 funds last quarter.

Let’s also examine hedge fund activity in other stocks similar to BP plc (ADR) (NYSE:BP). We will take a look at Sanofi SA (ADR) (NYSE:SNY), Kraft Heinz Co (NASDAQ:KHC), NTT Docomo Inc (ADR) (NYSE:DCM), and 3M Co (NYSE:MMM). This group of stocks’ market valuations are similar to BP’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SNY 30 716205 -2
KHC 52 31239057 -8
DCM 6 91843 -2
MMM 40 539304 3

As you can see these stocks had an average of 32 hedge funds with bullish positions and the average amount invested in these stocks was $8.15 billion. That figure was just $1.06 billion in BP’s case. Kraft Heinz Co (NASDAQ:KHC) is the most popular stock in this table. On the other hand NTT Docomo Inc (ADR) (NYSE:DCM) is the least popular one with only 6 bullish hedge fund positions. BP plc (ADR) (NYSE:BP) 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 have a lot of money invested in. In this regard KHC might be a better candidate to consider for a long position.

Disclosure: None