Should You Buy Atlas Energy LP (ATLS)?

What’s a smart Atlas Energy LP (NYSE:ATLS) investor to do?

If you were to ask many market players, hedge funds are perceived as bloated, outdated financial tools of a forgotten age. Although there are more than 8,000 hedge funds trading currently, this site aim at the top tier of this club, about 525 funds. It is widely held that this group has its hands on most of the smart money’s total capital, and by watching their highest performing stock picks, we’ve uncovered a few investment strategies that have historically outperformed the S&P 500. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 33 percentage points in 11 months (explore the details and some picks here).

Equally as key, optimistic insider trading sentiment is a second way to look at the world of equities. There are lots of motivations for an executive to get rid of shares of his or her company, but just one, very simple reason why they would buy. Many academic studies have demonstrated the useful potential of this tactic if you understand where to look (learn more here).

Thus, we’re going to discuss the recent info about Atlas Energy LP (NYSE:ATLS).

What have hedge funds been doing with Atlas Energy LP (NYSE:ATLS)?

At the end of the second quarter, a total of 16 of the hedge funds we track held long positions in this stock, a change of 7% from one quarter earlier. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were boosting their holdings significantly.

Atlas Energy LP (NYSE:ATLS)Out of the hedge funds we follow, Leon Cooperman’s Omega Advisors had the most valuable position in Atlas Energy LP (NYSE:ATLS), worth close to $194.7 million, comprising 3% of its total 13F portfolio. On Omega Advisors’s heels is Brian Jackelow of SAB Capital Management, with a $56.8 million call position; 15.6% of its 13F portfolio is allocated to the company. Remaining hedgies with similar optimism include Remy Trafelet’s Trafelet Capital, Wayne Cooperman’s Cobalt Capital Management and Matt McLennan’s First Eagle Investment Management.

As one would understandably expect, certain bigger names have jumped into Atlas Energy LP (NYSE:ATLS) headfirst. Omega Advisors, managed by Leon Cooperman, established the most outsized position in Atlas Energy LP (NYSE:ATLS). Omega Advisors had 194.7 million invested in the company at the end of the quarter. Brian Jackelow’s SAB Capital Management also initiated a $56.8 million position during the quarter. The following funds were also among the new ATLS investors: Remy Trafelet’s Trafelet Capital, Wayne Cooperman’s Cobalt Capital Management, and Matt McLennan’s First Eagle Investment Management.

What do corporate executives and insiders think about Atlas Energy LP (NYSE:ATLS)?

Bullish insider trading is best served when the company we’re looking at has experienced transactions within the past 180 days. Over the latest six-month time frame, Atlas Energy LP (NYSE:ATLS) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also take a look at the relationship between both of these indicators in other stocks similar to Atlas Energy LP (NYSE:ATLS). These stocks are Inergy, L.P. (NYSE:NRGY), Suburban Propane Partners LP (NYSE:SPH), Piedmont Natural Gas Company, Inc. (NYSE:PNY), Southwest Gas Corporation (NYSE:SWX), and WGL Holdings Inc (NYSE:WGL). This group of stocks are the members of the gas utilities industry and their market caps match ATLS’s market cap.