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NuStar GP Holdings, LLC (NSH): Balyasny Asset Management Goes Big

Dmitry Balyasny’s Balyasny Asset Management has raised its position in NuStar GP Holdings, LLC (NYSE:NSH). Balyasny Asset Management’s recent filing with the Securities and Exchange Commission (SEC) showed that the fund raised its stake in the company to 2.15 million shares from 25,000 shares it held earlier. Balyasny Asset Management now owns 5.04% of all common stock of NuStar GP Holdings, LLC (NYSE:NSH) as a passive investor.

Dmitry Balyasny

Balyasny Asset Management is a multi-strategy hedge fund founded by Dmitry Balyasny in 2001. Currently the firm manages an equity portfolio in excess of $8 billion, the largest chunk of which is invested in basic materials, followed by services sector. The fund initiated a stake in NuStar GP Holdings, LLC (NYSE:NSH) during the third quarter of last year. Since then it has been regularly trading in the stock, cutting its exposure significantly in one quarter only to increase it multifold in the next. Shares of NuStar GP Holdings, LLC (NYSE:NSH) are up by almost 70% since last year. Other major holdings of the fund include Gaming and Leisure Properties Inc (NASDAQ:GLPI), in which it increased its stake by 16% to over 4 million shares during second quarter, and Newfield Exploration Co. (NYSE:NFX), in which it reduced its exposure by 52% to 2.6 million shares during the second quarter. Gaming and Leisure Properties Inc (NASDAQ:GLPI) shares are down more than 25% year on year and Newfield Exploration Co. (NYSE:NFX) shares are down more than 5%.

NuStar GP Holdings, LLC (NYSE:NSH) is a $1.72 billion market cap master limited partnership that conducts operations through its indirect ownership interest in NuStar Energy L.P. (NYSE:NS). The company operates in three different business segments through its subsidiaries – NuStar Energy’s Pipeline Segment, NuStar Energy’s Storage Segment, and NuStar Energy’s Asphalt and Fuels Marketing Segment. For the second quarter of 2014, the company announced EPS of $0.37, compared to $0.29 in the same quarter last year. The company currently trades at nearly 23 times its forward earnings.

Other major institutional investors that own stock of NuStar GP Holdings, LLC (NYSE:NSH) include Jean-Marie Eveillard’s First Eagle Investment Management and Chuck Royce’s Royce & Associates. As of June 30, 2014, First Eagle Investment Management owns around 1.79 million shares and Royce and Associates owns around 370,000 shares. Between March 11 and 24, William Greehey, a director of NuStar GP Holdings, LLC (NYSE:NSH) purchased 205,000 shares of the company to take his total holding in the company’s share to over 8.2 million shares.

The consensus rating among analyst for the company is ‘Hold’, with an average price target of $44.40. On October 15, Bank of America upgraded NuStar GP Holdings, LLC (NYSE:NSH) to ‘Buy’ from ‘Underperform’ and raised its price target to $38 from $35.

Though when a fund that actively trades in a stock raises its stock, it doesn’t necessarily mean the stock is a buy. However, Balyasny Asset Management move of increasing its stake by over 2 million shares, when in its past it has never held more than over half million shares of the company can be seen a sign that the fund thinks the share will outperform in the near future.

Disclosure: None

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