Enbridge Energy Partners, L.P. (NYSE:EEP) has experienced a decrease in support from the world’s most elite money managers of late.
According to most stock holders, hedge funds are assumed to be worthless, old financial vehicles of yesteryear. While there are more than 8000 funds trading today, we choose to focus on the top tier of this group, around 450 funds. It is widely believed that this group controls most of all hedge funds’ total capital, and by monitoring their best picks, we have formulated a number of investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have beaten the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).
Equally as important, positive insider trading activity is a second way to parse down the world of equities. There are lots of reasons for a corporate insider to get rid of shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several empirical studies have demonstrated the valuable potential of this tactic if shareholders understand what to do (learn more here).
Consequently, let’s take a gander at the latest action surrounding Enbridge Energy Partners, L.P. (NYSE:EEP).
How have hedgies been trading Enbridge Energy Partners, L.P. (NYSE:EEP)?
At Q1’s end, a total of 5 of the hedge funds we track were long in this stock, a change of -17% from the first quarter. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their holdings substantially.
According to our comprehensive database, Jim Simons’s Renaissance Technologies had the biggest position in Enbridge Energy Partners, L.P. (NYSE:EEP), worth close to $15.8 million, accounting for less than 0.1%% of its total 13F portfolio. On Renaissance Technologies’s heels is Citadel Investment Group, managed by Ken Griffin, which held a $1.1 million call position; less than 0.1%% of its 13F portfolio is allocated to the company. Other hedge funds that hold long positions include Matthew Hulsizer’s PEAK6 Capital Management, Cliff Asness’s AQR Capital Management and Ken Griffin’s Citadel Investment Group.
Due to the fact that Enbridge Energy Partners, L.P. (NYSE:EEP) has faced a declination in interest from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of fund managers that elected to cut their entire stakes in Q1. Interestingly, Richard Driehaus’s Driehaus Capital cut the biggest position of all the hedgies we key on, comprising about $3.4 million in stock., and Russell Lucas of Lucas Capital Management was right behind this move, as the fund dumped about $3.2 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds in Q1.
How have insiders been trading Enbridge Energy Partners, L.P. (NYSE:EEP)?
Insider purchases made by high-level executives is at its handiest when the primary stock in question has experienced transactions within the past six months. Over the last six-month time period, Enbridge Energy Partners, L.P. (NYSE:EEP) has seen 3 unique insiders buying, and zero insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to Enbridge Energy Partners, L.P. (NYSE:EEP). These stocks are Sunoco Logistics Partners L.P. (NYSE:SXL), Magellan Midstream Partners, L.P. (NYSE:MMP), Kinder Morgan Management, LLC (NYSE:KMR), El Paso Pipeline Partners, L.P. (NYSE:EPB), and Pembina Pipeline Corp (NYSE:PBA). This group of stocks belong to the oil & gas pipelines industry and their market caps resemble EEP’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Sunoco Logistics Partners L.P. (NYSE:SXL) | 6 | 2 | 1 |
| Magellan Midstream Partners, L.P. (NYSE:MMP) | 11 | 0 | 1 |
| Kinder Morgan Management, LLC (NYSE:KMR) | 10 | 0 | 0 |
| El Paso Pipeline Partners, L.P. (NYSE:EPB) | 6 | 0 | 0 |
| Pembina Pipeline Corp (NYSE:PBA) | 8 | 0 | 0 |
With the returns exhibited by our strategies, retail investors should always watch hedge fund and insider trading activity, and Enbridge Energy Partners, L.P. (NYSE:EEP) shareholders fit into this picture quite nicely.
