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Is Steel Partners Holdings LP (SPLP) Going to Burn These Hedge Funds?

The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Steel Partners Holdings LP (NYSE:SPLP).

Steel Partners Holdings LP (NYSE:SPLP) has seen an increase in hedge fund sentiment during the third quarter, amid a 6% decline of the stock. However, 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 Timkensteel Corp (NYSE:TMST), WL Ross Holding Corp (NASDAQ:WLRHU), and Star Bulk Carriers Corp. (NASDAQ:SBLK) to gather more data points.

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In the financial world there are a large number of signals market participants put to use to grade stocks. A pair of the most innovative signals are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the top picks of the top fund managers can outclass the market by a very impressive amount (see the details here).

Keeping this in mind, let’s take a glance at the new action surrounding Steel Partners Holdings LP (NYSE:SPLP).

Hedge fund activity in Steel Partners Holdings LP (NYSE:SPLP)

At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a change of 40% from the second quarter. Among them, unsurprisingly, Steel Partners, managed by Warren Lichtenstein, holds the biggest position in Steel Partners Holdings LP (NYSE:SPLP), which was valued at $58.2 million, comprising 9.4% of its 13F portfolio. On Steel Partners’s heels is William C. Martin’s Raging Capital Management, with a $7.1 million position; the fund has 0.9% of its 13F portfolio invested in the stock. Some other professional money managers that hold long positions contain Nathaniel August’s Mangrove Partners, J. Carlo Cannell’s Cannell Capital and Mario Gabelli’s GAMCO Investors.

Consequently, some big names have been driving this bullishness. Raging Capital Management created the largest position in Steel Partners Holdings LP (NYSE:SPLP). Jonathan Kolatch’s Redwood Capital Management also made a $0.3 million investment in the stock during the quarter. The only other fund with a new position in the stock is Michael Price’s MFP Investors.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Steel Partners Holdings LP (NYSE:SPLP) but similarly valued. We will take a look at Timkensteel Corp (NYSE:TMST), WL Ross Holding Corp (NASDAQ:WLRHU), Star Bulk Carriers Corp. (NASDAQ:SBLK), and Ennis, Inc. (NYSE:EBF). All of these stocks’ market caps match SPLP’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TMST 16 33449 3
WLRHU 19 109151 1
SBLK 6 297888 -2
EBF 14 22993 -2

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $116 million. That figure was $74 million in SPLP’s case. WL Ross Holding Corp (NASDAQ:WLRHU) is the most popular stock in this table. On the other hand Star Bulk Carriers Corp. (NASDAQ:SBLK) is the least popular one with only 6 bullish hedge fund positions. Steel Partners Holdings LP (NYSE:SPLP) is not the least popular stock in this group, but hedge fund interest is considerably below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard WLRHU might be a better candidate to consider a long position.

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