Should You Buy Energy Transfer Equity, L.P. (ETE)?

Page 1 of 2

What’s a smart Energy Transfer Equity, L.P. (NYSE:ETE) investor to do?

To many of your peers, hedge funds are seen as bloated, outdated financial tools of a forgotten age. Although there are over 8,000 hedge funds with their doors open in present day, this site aim at the moguls of this group, close to 525 funds. Analysts calculate that this group controls the majority of the hedge fund industry’s total assets, and by paying attention to their best stock picks, we’ve discovered a few investment strategies that have historically outpaced the S&P 500. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we‘ve began to 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 (find a sample of our picks).

Equally as key, bullish insider trading activity is another way to look at the stock market universe. Obviously, there are many motivations for a bullish insider to drop shares of his or her company, but only one, very simple reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the market-beating potential of this tactic if piggybackers know where to look (learn more here).

What’s more, it’s important to examine the recent info surrounding Energy Transfer Equity, L.P. (NYSE:ETE).

Hedge fund activity in Energy Transfer Equity, L.P. (NYSE:ETE)

At the end of the second quarter, a total of 15 of the hedge funds we track were long in this stock, a change of 25% from one quarter earlier. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes significantly.

Energy Transfer Equity, L.P. (ETE)When using filings from the hedgies we track, Kenneth Mario Garschina’s Mason Capital Management had the most valuable position in Energy Transfer Equity, L.P. (NYSE:ETE), worth close to $487.4 million, comprising 9.7% of its total 13F portfolio. Coming in second is Daniel S. Och of OZ Management, with a $286.6 million position; 0.9% of its 13F portfolio is allocated to the stock. Some other hedgies with similar optimism include Dmitry Balyasny’s Balyasny Asset Management, and Jim Simons’s Renaissance Technologies.

Now, specific money managers have jumped into Energy Transfer Equity, L.P. (NYSE:ETE) headfirst. Mason Capital Management, managed by Kenneth Mario Garschina, assembled the most outsized position in Energy Transfer Equity, L.P. (NYSE:ETE). Mason Capital Management had 487.4 million invested in the company at the end of the quarter. Daniel S. Och’s OZ Management also made a $286.6 million investment in the stock during the quarter. The following funds were also among the new ETE investors: Dmitry Balyasny’s Balyasny Asset Management, Israel Englander’s Millennium Management, and Jim Simons’s Renaissance Technologies.

How are insiders trading Energy Transfer Equity, L.P. (NYSE:ETE)?

Insider buying is at its handiest when the company in question has experienced transactions within the past half-year. Over the latest 180-day time frame, Energy Transfer Equity, L.P. (NYSE:ETE) has experienced zero unique insiders buying, 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 Energy Transfer Equity, L.P. (NYSE:ETE). These stocks are Magellan Midstream Partners, L.P. (NYSE:MMP), Oneok Partners LP (NYSE:OKS), Spectra Energy Corp. (NYSE:SE), Plains All American Pipeline, L.P. (NYSE:PAA), and Energy Transfer Partners LP (NYSE:ETP). This group of stocks are in the oil & gas pipelines industry and their market caps are closest to ETE’s market cap.

Page 1 of 2