Is Williams Partners L.P. (NYSE:WPZ) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to find the latest market-moving information.
Williams Partners L.P. shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 19 hedge funds’ portfolios at the end of the third quarter of 2015. At the end of this article, we will also compare WPZ to other stocks including Zimmer Biomet Holdings Inc (NYSE:ZBH), Hartford Financial Services Group Inc (NYSE:HIG), and TELUS Corporation (USA) (NYSE:TU) to get a better sense of its popularity.
In today’s marketplace, there are tons of indicators investors have at their disposal to analyze their holdings. Two of the most innovative indicators are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the elite money managers can outpace the S&P 500 by a healthy amount (see the details here).
Keeping this in mind, let’s take a peek at the key action regarding Williams Partners L.P. (NYSE:WPZ).
How are hedge funds trading Williams Partners L.P. (NYSE:WPZ)?
Heading into Q4, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Magnetar Capital, managed by Alec Litowitz and Ross Laser, holds the biggest position in Williams Partners L.P. (NYSE:WPZ). Magnetar Capital has a $92.4 million position in the stock, comprising 2.4% of its 13F portfolio. The second largest stake is held by Water Island Capital, led by John Orrico, holding a $25.2 million position; 1.3% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors that are bullish include Jim Simons’s Renaissance Technologies, Charles Davidson’s Wexford Capital and Israel Englander’s Millennium Management.
Since Williams Partners L.P. (NYSE:WPZ) has faced falling interest from the smart money, it’s safe to say that there lies a certain “tier” of fund managers who sold off their positions entirely in the third quarter. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management cut the largest position of all the hedgies watched by Insider Monkey, totaling close to $65.6 million in stock. Daniel S. Och’s fund, OZ Management, also dropped its stock, about $21 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now review hedge fund activity in other stocks similar to Williams Partners L.P. (NYSE:WPZ). We will take a look at Zimmer Biomet Holdings Inc (NYSE:ZBH), Hartford Financial Services Group Inc (NYSE:HIG), TELUS Corporation (USA) (NYSE:TU), and Fidelity National Information Services (NYSE:FIS). This group of stocks’ market values are similar to WPZ’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 35 hedge funds with bullish positions and the average amount invested in these stocks was $900 million. That figure was $170 million in WPZ’s case. Hartford Financial Services Group Inc (NYSE:HIG) is the most popular stock in this table, while the least popular one is TELUS Corporation (USA) (NYSE:TU). In comparison, with 19 bullish hedge fund positions, Williams Partners L.P. (NYSE:WPZ) is not the least popular stock in this group, but still it has not attracted much attention from investors. This may imply that this stock doesn’t represent a good buying opportunity at the moment. Therefore, we’d rather spend our time researching stocks that hedge funds are collectively the fondest of and, in this case, HIG may be a better alternative.