Where Do Hedge Funds Stand On BP plc (BP)?

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is BP plc (NYSE:BP), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Is BP plc (NYSE:BP) a marvelous investment today? Prominent investors were becoming less confident. The number of bullish hedge fund positions retreated by 1 recently. BP plc (NYSE:BP) was in 29 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 40. Our calculations also showed that BP isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to check out the new hedge fund action surrounding BP plc (NYSE:BP).

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Do Hedge Funds Think BP Is A Good Stock To Buy Now?

At the end of September, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a change of -3% from the second quarter of 2021. By comparison, 30 hedge funds held shares or bullish call options in BP a year ago. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Fisher Asset Management, managed by Ken Fisher, holds the largest position in BP plc (NYSE:BP). Fisher Asset Management has a $345.3 million position in the stock, comprising 0.2% of its 13F portfolio. On Fisher Asset Management’s heels is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $130.4 million position; 0.2% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that hold long positions consist of John Overdeck and David Siegel’s Two Sigma Advisors, Ken Griffin’s Citadel Investment Group and Benjamin A. Smith’s Laurion Capital Management. In terms of the portfolio weights assigned to each position Kahn Brothers allocated the biggest weight to BP plc (NYSE:BP), around 8.78% of its 13F portfolio. Stamos Capital is also relatively very bullish on the stock, setting aside 3.5 percent of its 13F equity portfolio to BP.

Judging by the fact that BP plc (NYSE:BP) has faced a decline in interest from the smart money, it’s easy to see that there is a sect of fund managers that elected to cut their entire stakes heading into Q4. It’s worth mentioning that Renaissance Technologies dumped the biggest position of the “upper crust” of funds followed by Insider Monkey, comprising close to $73.8 million in stock, and David Tepper’s Appaloosa Management LP was right behind this move, as the fund cut about $10.6 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 1 funds heading into Q4.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as BP plc (NYSE:BP) but similarly valued. We will take a look at Snowflake Inc (NYSE:SNOW), Anthem Inc (NYSE:ANTM), ConocoPhillips (NYSE:COP), Analog Devices, Inc. (NASDAQ:ADI), U.S. Bancorp (NYSE:USB), Gilead Sciences, Inc. (NASDAQ:GILD), and PetroChina Company Limited (NYSE:PTR). This group of stocks’ market values resemble BP’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SNOW 73 14569929 3
ANTM 59 4585560 -8
COP 49 1371142 -1
ADI 74 5698767 12
USB 42 8390873 1
GILD 55 1751615 1
PTR 7 94903 -1
Average 51.3 5208970 1

View table here if you experience formatting issues.

As you can see these stocks had an average of 51.3 hedge funds with bullish positions and the average amount invested in these stocks was $5209 million. That figure was $1053 million in BP’s case. Analog Devices, Inc. (NASDAQ:ADI) is the most popular stock in this table. On the other hand PetroChina Company Limited (NYSE:PTR) is the least popular one with only 7 bullish hedge fund positions. BP plc (NYSE:BP) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BP is 42.2. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and surpassed the market again by 5.6 percentage points. Unfortunately BP wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); BP investors were disappointed as the stock returned -3.9% since the end of September (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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Disclosure: None. This article was originally published at Insider Monkey.