Is Rice Midstream Partners LP (RMP) A Good Stock To Buy?

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As one would reasonably expect, specific money managers have been driving this bullishness. Marshall Wace LLP, led by Paul Marshall and Ian Wace, created the biggest position in Rice Midstream Partners LP(NYSE:RMP). Marshall Wace LLP had $2.8 million invested in the company at the end of the quarter. T Boone Pickens’s BP Capital also made a $1.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Matthew Hulsizer’s PEAK6 Capital Management and Richard Driehaus’s Driehaus Capital.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Rice Midstream Partners LP(NYSE:RMP) but similarly valued. We will take a look at Cott Corporation (USA) (NYSE:COT), Allegheny Technologies Incorporated (NYSE:ATI), International Bancshares Corp (NASDAQ:IBOC), and SolarCity Corp (NASDAQ:SCTY). All of these stocks’ market caps are similar to RMP’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
COT 22 370670 7
ATI 13 183180 -4
IBOC 10 37911 -1
SCTY 19 82586 -7

As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $169 million. That figure was $125 million in RMP’s case. Cott Corporation (USA) (NYSE:COT) is the most popular stock in this table. On the other hand International Bancshares Corp (NASDAQ:IBOC) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Rice Midstream Partners LP(NYSE:RMP) is even less popular than IBOC. 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.

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