Do Hedge Funds Love Sunoco Logistics Partners L.P. (SXL)?

A whopping number of 13F filings filed with the U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Sunoco Logistics Partners L.P. (NYSE:SXL).

Sunoco Logistics Partners L.P. investors should be aware of a decrease in support from the world’s most elite money managers lately. At the end of this article we will also compare SXL to other stocks, including The Cooper Companies, Inc. (NYSE:COO), VimpelCom Ltd (ADR) (NASDAQ:VIP), and Mednax Inc. (NYSE:MD) to get a better sense of its popularity.

If you’d ask most stock holders, hedge funds are perceived as slow, old investment tools of the past. While there are more than 8000 funds with their doors open at present, We choose to focus on the masters of this club, around 700 funds. These hedge fund managers control the lion’s share of all hedge funds’ total capital, and by tailing their inimitable equity investments, Insider Monkey has come up with numerous investment strategies that have historically outrun the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy outperformed the S&P 500 index by 12 percentage points a year for a decade in their back tests.

With all of this in mind, we’re going to take a glance at the new action encompassing Sunoco Logistics Partners L.P. (NYSE:SXL).

How are hedge funds trading Sunoco Logistics Partners L.P. (NYSE:SXL)?

Heading into Q4, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a change of -10% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Renaissance Technologies holds the most valuable position in Sunoco Logistics Partners L.P. (NYSE:SXL). Renaissance Technologies has a $42.4 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is George Hall’s Clinton Group, with a $7.5 million position; 0.7% of its 13F portfolio is allocated to the stock. The remaining professional money managers that are bullish encompass Dmitry Balyasny’s Balyasny Asset Management, Brian Newman and David Heller’s Cloud Gate Capital and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Judging by the fact that Sunoco Logistics Partners L.P. (NYSE:SXL) has witnessed declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there lies a certain “tier” of hedge funds who sold off their entire stakes heading into Q4. It’s worth mentioning that Millennium Management Subsidiary’s Green Arrow Capital Management said goodbye to the largest position of the “upper crust” of funds tracked by Insider Monkey, worth an estimated $4.1 million in call options., and Millennium Management was right behind this move, as the fund dumped about $1.9 million worth.

Let’s go over hedge fund activity in other stocks similar to Sunoco Logistics Partners L.P. (NYSE:SXL). These stocks are The Cooper Companies, Inc. (NYSE:COO), VimpelCom Ltd (ADR) (NASDAQ:VIP), Mednax Inc. (NYSE:MD), and Arthur J. Gallagher & Co. (NYSE:AJG). All of these stocks’ market caps match SXL’s market cap.

As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $248 million, compared to just $67 million in SXL’s case. The Cooper Companies, Inc. (NYSE:COO) is the most popular stock in this table and VimpelCom Ltd (ADR) (NASDAQ:VIP) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Sunoco Logistics Partners L.P. (NYSE:SXL) is even less popular than VIP. Considering that hedge funds aren’t fond of this stock in relation to other companies covered in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.