World-class money managers like Bill Ackman and Barry Rosenstein only invest their wealthy clients’ money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It’s not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It’s also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.
Ferrellgas Partners, L.P. (NYSE:FGP) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 4 hedge funds’ portfolios at the end of the third quarter of 2015. At the end of this article we will also compare FGP to other stocks including Mellanox Technologies, Ltd. (NASDAQ:MLNX), Eastgroup Properties Inc (NYSE:EGP), and Heartland Express, Inc. (NASDAQ:HTLD) to get a better sense of its popularity.
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Keeping this in mind, let’s take a glance at the key action surrounding Ferrellgas Partners, L.P. (NYSE:FGP).
What does the smart money think about Ferrellgas Partners, L.P. (NYSE:FGP)?
At the end of the third quarter, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jim Simons’s Renaissance Technologies has the number one position in Ferrellgas Partners, L.P. (NYSE:FGP), worth close to $5.8 million, comprising less than 0.1% of its total 13F portfolio. On Renaissance Technologies’s heels is Matthew Hulsizer of PEAK6 Capital Management, with a $2.1 million call position; the fund has less than 0.1% of its 13F portfolio invested in the stock.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 700+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Citadel Investment Group).
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Ferrellgas Partners, L.P. (NYSE:FGP) but similarly valued. We will take a look at Mellanox Technologies, Ltd. (NASDAQ:MLNX), Eastgroup Properties Inc (NYSE:EGP), Heartland Express, Inc. (NASDAQ:HTLD), and Proto Labs Inc (NYSE:PRLB). All of these stocks’ market caps match FGP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MLNX | 33 | 411147 | -1 |
| EGP | 14 | 61083 | 8 |
| HTLD | 12 | 105107 | -7 |
| PRLB | 9 | 70165 | 3 |
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $162 million. That figure was $9 million in FGP’s case. Mellanox Technologies, Ltd. (NASDAQ:MLNX) is the most popular stock in this table. On the other hand Proto Labs Inc (NYSE:PRLB) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Ferrellgas Partners, L.P. (NYSE:FGP) is even less popular than PRLB. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed 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.
