Is BKEP Stock A Good Buy?

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 Blueknight Energy Partners L.P. (NASDAQ:BKEP) based on that data.

Is BKEP stock a good buy? Prominent investors were turning bullish. The number of long hedge fund positions went up by 1 in recent months. Blueknight Energy Partners L.P. (NASDAQ:BKEP) was in 4 hedge funds’ portfolios at the end of March. The all time high for this statistic is 3. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BKEP isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Ken Griffin of Citadel Investment Group

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $27 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. 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. With all of this in mind we’re going to take a look at the recent hedge fund action encompassing Blueknight Energy Partners L.P. (NASDAQ:BKEP).

Do Hedge Funds Think BKEP Is A Good Stock To Buy Now?

At the end of the first quarter, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards BKEP over the last 23 quarters. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

Of the funds tracked by Insider Monkey, DG Capital Management, managed by Dov Gertzulin, holds the number one position in Blueknight Energy Partners L.P. (NASDAQ:BKEP). DG Capital Management has a $10 million position in the stock, comprising 2.4% of its 13F portfolio. The second most bullish fund manager is Cyrus Capital Partners, led by Stephen C. Freidheim, holding a $2.4 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Other peers that hold long positions comprise Ali Motamed’s Invenomic Capital Management, Ken Griffin’s Citadel Investment Group and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position DG Capital Management allocated the biggest weight to Blueknight Energy Partners L.P. (NASDAQ:BKEP), around 2.39% of its 13F portfolio. Cyrus Capital Partners is also relatively very bullish on the stock, dishing out 0.59 percent of its 13F equity portfolio to BKEP.

As industrywide interest jumped, specific money managers have jumped into Blueknight Energy Partners L.P. (NASDAQ:BKEP) headfirst. Citadel Investment Group, managed by Ken Griffin, created the biggest position in Blueknight Energy Partners L.P. (NASDAQ:BKEP). Citadel Investment Group had $0.3 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.1 million position during the quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Blueknight Energy Partners L.P. (NASDAQ:BKEP) but similarly valued. These stocks are Union Bankshares, Inc. (NASDAQ:UNB), AEterna Zentaris Inc. (NASDAQ:AEZS), Oblong Inc. (NASDAQ:OBLG), Nicholas Financial, Inc. (NASDAQ:NICK), CollPlant Biotechnologies Ltd. (NASDAQ:CLGN), Lipocine Inc (NASDAQ:LPCN), and CF Bankshares Inc (NASDAQ:CFBK). This group of stocks’ market valuations match BKEP’s market valuation.

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As you can see these stocks had an average of 2.1 hedge funds with bullish positions and the average amount invested in these stocks was $9 million. That figure was $14 million in BKEP’s case. AEterna Zentaris Inc. (NASDAQ:AEZS) is the most popular stock in this table. On the other hand CollPlant Biotechnologies Ltd. (NASDAQ:CLGN) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Blueknight Energy Partners L.P. (NASDAQ:BKEP) is more popular among hedge funds. Our overall hedge fund sentiment score for BKEP is 86. 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 returned 17.2% in 2021 through June 11th but still managed to beat the market by 3.3 percentage points. Hedge funds were also right about betting on BKEP as the stock returned 23.6% since the end of March (through 6/11) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

Disclosure: None. This article was originally published at Insider Monkey.