On Monday, Wall Street is trading lower led by a drop in tech stocks and concerns regarding the future of oil prices. Among the top losers are several energy stocks, including Chesapeake Energy Corporation (NYSE:CHK), Williams Companies Inc (NYSE:WMB), Williams Partners LP (NYSE:WPZ), Energy Transfer Equity LP (NYSE:ETE), and Energy Transfer Partners LP (NYSE:ETP). In this article, we are going to take a look at the latest developments that have sent these stocks lower today and see what smart money investors think about them.
While there are many metrics that investors can assess in the investment process, the hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor beat the S&P 500 by around 95 basis points per month (see more details here).
Back to Monday’s losers, we’ve got Energy Transfer Equity LP (NYSE:ETE), which is off by 37% and reached a 52-week low, based on a SEC filing stating that CFO Jamie Welch, a man who was involved in the merger with Williams Companies Inc (NYSE:WMB), will be replaced by Thomas Long, Energy Transfer Partners (NYSE:ETP)’s CFO. This news has probably generated fear in investors about the proposed acquisition of the company Williams Cos. (WMB). Moreover, the analysts at Robert W. Baird downgraded the stock to ‘Neutral’ from ‘Outperform’ and lowered the price target to $7 from $30. Other company that is affected by the regulatory filing is Energy Transfer Partners LP (NYSE:ETP), which is 22% in the red today, despite Jim Cramer’s positive view of the firm’s dividends.
Energy Transfer Equity LP (NYSE:ETE) lost popularity among the investors that we track in the third quarter. A total of 27 funds held shares of the company at the end of September, down by six over the quarter, and they amassed only 3.2% of the float. Among them, Daniel S. Och‘s Oz Management was the largest shareholder, reporting a position of 13.68 million shares in its last 13F filing.
On the other hand, the hedge fund sentiment towards Energy Transfer Partners LP (NYSE:ETP) remained unchanged, as the number of investors long the stock stood at 18 at the end of the third quarter. Among the bulls was Alec Litowitz and Ross Laser‘s Magnetar Capital, with a holding of 4.27 million shares at the end of September.
Williams Companies Inc (NYSE:WMB) and Williams Partners LP (NYSE:WPZ) have also plunged following the news from Energy Transfer Equity. Contributing to their fall is also the decline of oil prices, as well as the announcement regarding the restructuring of Chesapeake Energy Corporation, which will be discussed later on in this article.