Energy Transfer Equity, L.P. (NYSE:ETE) was in 12 hedge funds’ portfolio at the end of December. ETE has seen a decrease in support from the world’s most elite money managers of late. There were 12 hedge funds in our database with ETE holdings at the end of the previous quarter.
If you’d ask most investors, hedge funds are perceived as underperforming, outdated financial vehicles of years past. While there are more than 8000 funds trading today, we hone in on the leaders of this club, close to 450 funds. It is estimated that this group has its hands on most of the hedge fund industry’s total asset base, and by watching their highest performing stock picks, we have determined a few investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outperformed 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 trumped the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Just as important, optimistic insider trading sentiment is another way to parse down the world of equities. As the old adage goes: there are lots of motivations for an upper level exec to sell shares of his or her company, but just one, very obvious reason why they would behave bullishly. Many empirical studies have demonstrated the market-beating potential of this method if investors understand what to do (learn more here).
With all of this in mind, let’s take a look at the recent action surrounding Energy Transfer Equity, L.P. (NYSE:ETE).
What have hedge funds been doing with Energy Transfer Equity, L.P. (NYSE:ETE)?
In preparation for this year, a total of 12 of the hedge funds we track held long positions in this stock, a change of 0% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their stakes significantly.
Of the funds we track, Kenneth Mario Garschina’s Mason Capital Management had the largest position in Energy Transfer Equity, L.P. (NYSE:ETE), worth close to $370.6 million, accounting for 5.3% of its total 13F portfolio. On Mason Capital Management’s heels is OZ Management, managed by Daniel S. Och, which held a $99.2 million position; 0.4% of its 13F portfolio is allocated to the company. Other hedge funds that are bullish include Sean Cullinan’s Point State Capital, Chuck Royce’s Royce & Associates and Jean-Marie Eveillard’s First Eagle Investment Management.
Seeing as Energy Transfer Equity, L.P. (NYSE:ETE) has faced a declination in interest from the smart money, it’s safe to say that there is a sect of funds who were dropping their positions entirely in Q4. It’s worth mentioning that Sander Gerber’s Hudson Bay Capital Management dropped the biggest position of the 450+ funds we key on, worth an estimated $9 million in call options, and Curtis Schenker and Craig Effron of Scoggin was right behind this move, as the fund sold off about $6.1 million worth. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
How are insiders trading Energy Transfer Equity, L.P. (NYSE:ETE)?
Insider purchases made by high-level executives is particularly usable when the company we’re looking at has experienced transactions within the past six months. Over the latest 180-day time period, Energy Transfer Equity, L.P. (NYSE:ETE) has experienced 1 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also take a look at hedge fund and insider activity 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 match ETE’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Magellan Midstream Partners, L.P. (NYSE:MMP) | 9 | 0 | 1 |
| Oneok Partners LP (NYSE:OKS) | 5 | 1 | 0 |
| Spectra Energy Corp. (NYSE:SE) | 13 | 0 | 5 |
| Plains All American Pipeline, L.P. (NYSE:PAA) | 9 | 0 | 0 |
| Energy Transfer Partners LP (NYSE:ETP) | 12 | 0 | 0 |
With the results shown by the aforementioned research, retail investors must always monitor hedge fund and insider trading activity, and Energy Transfer Equity, L.P. (NYSE:ETE) shareholders fit into this picture quite nicely.
