Is Spectra Energy Partners, LP (SEP) a Good Stock to Buy?

Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that dumped their entire stakes in the stock during the third quarter. Interestingly, Paul Marshall and Ian Wace’s Marshall Wace LLP dumped the biggest investment of all the hedgies studied by Insider Monkey, valued at close to $7.5 million in stock, and Richard Driehaus’ Driehaus Capital was right behind this move, as the fund dropped about $4.7 million worth of shares.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Spectra Energy Partners, LP (NYSE:SEP) but similarly valued. We will take a look at Marathon Oil Corporation (NYSE:MRO), Microchip Technology Inc. (NASDAQ:MCHP), Alcoa Inc (NYSE:AA), and Henry Schein, Inc. (NASDAQ:HSIC). All of these stocks’ market caps match SEP’s market cap.

As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $806 million. That figure was $56 million in SEP’s case. Alcoa Inc (NYSE:AA) is the most popular stock in this table. On the other hand Marathon Oil Corporation (NYSE:MRO) is the least popular one with only 22 bullish hedge fund positions. Compared to these stocks Spectra Energy Partners, LP (NYSE:SEP) is even less popular than MRO. 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.

Disclosure: None