Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the fourth quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Enterprise Products Partners L.P. (NYSE:EPD) based on that data.
Is Enterprise Products Partners L.P. (NYSE:EPD) the right investment to pursue these days? Prominent investors were taking a pessimistic view. The number of bullish hedge fund bets fell by 4 lately. Enterprise Products Partners L.P. (NYSE:EPD) was in 26 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 30. Our calculations also showed that EPD isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Stuart Zimmer of Zimmer Partners
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to take a look at the recent hedge fund action encompassing Enterprise Products Partners L.P. (NYSE:EPD).
Do Hedge Funds Think EPD Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -13% from the fourth quarter of 2020. By comparison, 26 hedge funds held shares or bullish call options in EPD a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, holds the most valuable position in Enterprise Products Partners L.P. (NYSE:EPD). Arrowstreet Capital has a $81.1 million position in the stock, comprising 0.1% of its 13F portfolio. On Arrowstreet Capital’s heels is Appaloosa Management LP, managed by David Tepper, which holds a $71.3 million position; the fund has 1% of its 13F portfolio invested in the stock. Remaining peers that are bullish consist of Stuart J. Zimmer’s Zimmer Partners, and Henry Breck’s Heronetta Management. In terms of the portfolio weights assigned to each position Heronetta Management allocated the biggest weight to Enterprise Products Partners L.P. (NYSE:EPD), around 14.26% of its 13F portfolio. Plaisance Capital is also relatively very bullish on the stock, setting aside 5.15 percent of its 13F equity portfolio to EPD.
Seeing as Enterprise Products Partners L.P. (NYSE:EPD) has experienced declining sentiment from the aggregate hedge fund industry, we can see that there lies a certain “tier” of funds who sold off their entire stakes in the first quarter. Interestingly, Louis Bacon’s Moore Global Investments dumped the largest investment of all the hedgies tracked by Insider Monkey, comprising close to $41.4 million in stock. Blair Baker’s fund, Precept Capital Management, also dumped its stock, about $14.5 million worth. These transactions are important to note, as total hedge fund interest dropped by 4 funds in the first quarter.
Let’s go over hedge fund activity in other stocks similar to Enterprise Products Partners L.P. (NYSE:EPD). These stocks are Freeport-McMoRan Inc. (NYSE:FCX), Ford Motor Company (NYSE:F), ING Groep N.V. (NYSE:ING), Dow Inc. (NYSE:DOW), Walgreens Boots Alliance Inc (NASDAQ:WBA), Kimberly Clark Corporation (NYSE:KMB), and Pinterest, Inc. (NYSE:PINS). All of these stocks’ market caps match EPD’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FCX | 68 | 3290981 | 7 |
| F | 49 | 2197658 | 8 |
| ING | 10 | 532082 | 1 |
| DOW | 41 | 717981 | -6 |
| WBA | 41 | 1132820 | 5 |
| KMB | 31 | 1287433 | -6 |
| PINS | 83 | 4189031 | -12 |
| Average | 46.1 | 1906855 | -0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 46.1 hedge funds with bullish positions and the average amount invested in these stocks was $1907 million. That figure was $299 million in EPD’s case. Pinterest, Inc. (NYSE:PINS) is the most popular stock in this table. On the other hand ING Groep N.V. (NYSE:ING) is the least popular one with only 10 bullish hedge fund positions. Enterprise Products Partners L.P. (NYSE:EPD) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for EPD is 38. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through July 9th and beat the market by 6.7 percentage points. A small number of hedge funds were also right about betting on EPD, though not to the same extent, as the stock returned 13% since the end of Q1 (through July 9th) and outperformed the market.
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Disclosure: None. This article was originally published at Insider Monkey.
