Hedge Funds Are Betting On Boardwalk Pipeline Partners, LP (BWP)

Is Boardwalk Pipeline Partners, LP (NYSE:BWP) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

Boardwalk Pipeline Partners, LP (NYSE:BWP) was in 17 hedge funds’ portfolios at the end of September. BWP shareholders have witnessed an increase in support from the world’s most elite money managers recently. There were 15 hedge funds in our database with BWP positions at the end of the previous quarter. At the end of this article we will also compare BWP to other stocks including Cedar Fair, L.P. (NYSE:FUN), Cobalt International Energy, Inc. (NYSE:CIE), and Curtiss-Wright Corp. (NYSE:CW) to get a better sense of its popularity.

To most stock holders, hedge funds are viewed as unimportant, outdated financial vehicles of yesteryear. While there are over an 8000 funds in operation today, Our researchers choose to focus on the aristocrats of this club, approximately 700 funds. It is estimated that this group of investors command most of all hedge funds’ total capital, and by watching their first-class equity investments, Insider Monkey has determined many investment strategies that have historically beaten 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 check out the recent action encompassing Boardwalk Pipeline Partners, LP (NYSE:BWP).

Hedge fund activity in Boardwalk Pipeline Partners, LP (NYSE:BWP)

At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, an increase of 13% from the second quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Alec Litowitz and Ross Laser’s Magnetar Capital has the biggest position in Boardwalk Pipeline Partners, LP (NYSE:BWP), worth close to $78.5 million, corresponding to 2% of its total 13F portfolio. The second largest stake is held by Balyasny Asset Management, led by Dmitry Balyasny, holding a $45.1 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish encompass Kieran Goodwin’s Panning Capital Management, James Dondero’s Highland Capital Management and Jim Simons’s Renaissance Technologies.

With a general bullishness amongst the heavyweights, specific money managers were leading the bulls’ herd. MFP Investors, managed by Michael Price, initiated the most outsized position in Boardwalk Pipeline Partners, LP (NYSE:BWP). According to its latest 13F filing, the fund had $1.2 million invested in the company at the end of the quarter. Richard Driehaus’s Driehaus Capital also initiated a $0.8 million position during the quarter. The only other fund with a new position in the stock is Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Boardwalk Pipeline Partners, LP (NYSE:BWP) but similarly valued. We will take a look at Cedar Fair, L.P. (NYSE:FUN), Cobalt International Energy, Inc. (NYSE:CIE), Curtiss-Wright Corp. (NYSE:CW), and Firstmerit Corp (NASDAQ:FMER). This group of stocks’ market values are closest to BWP’s market value.

As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $341 million. That figure was a disappointing $170 million in BWP’s case. Cobalt International Energy, Inc. (NYSE:CIE) is the most popular stock in this table, while Cedar Fair, L.P. (NYSE:FUN) is at the other end of the specter with only 10 bullish hedge fund positions. Boardwalk Pipeline Partners, LP (NYSE:BWP) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard CIE might be a better candidate to consider a long position.