Is Blackstone Group LP (NYSE:BX) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from industry insiders. They fail miserably sometimes but historically their consensus stock picks outperformed the market after adjusting for known risk factors.
Blackstone Group LP (NYSE:BX) shares haven’t seen a lot of action during the fourth quarter. Overall, hedge fund sentiment was unchanged. The stock was in 32 hedge funds’ portfolios at the end of September. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Activision Blizzard, Inc. (NASDAQ:ATVI), Aon PLC (NYSE:AON), and Johnson Controls, Inc. (NYSE:JCI) to gather more data points.
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Keeping this in mind, let’s check out the fresh action surrounding Blackstone Group LP (NYSE:BX).
Hedge fund activity in Blackstone Group LP (NYSE:BX)
At the end of the third quarter, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, unchanged from the second quarter of 2016. With the smart money’s sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Select Equity Group, managed by Robert Joseph Caruso, holds the largest position in Blackstone Group LP (NYSE:BX). The fund reportedly has a $186.1 million position in the stock, comprising 1.6% of its 13F portfolio. The second most bullish fund manager is HMI Capital, managed by Mick Hellman, which holds a $41.1 million bet; 6.8% of its 13F portfolio is allocated to the company. Other professional money managers with similar optimism encompass John W. Rogers’s Ariel Investments, Jim Simons’s Renaissance Technologies and Julian Robertson’s Tiger Management.
Seeing as Blackstone Group LP (NYSE:BX) has witnessed no change in interest from the entirety of the hedge funds we track, we must take a look at a select few money managers that slashed their positions entirely last quarter. At the top of the heap, Howard Marks’s Oaktree Capital Management cut the largest position of the 700 funds monitored by Insider Monkey, valued at close to $12.9 million in call options, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund said goodbye to about $7.4 million worth of options. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Blackstone Group LP (NYSE:BX) but similarly valued. These stocks are Activision Blizzard, Inc. (NASDAQ:ATVI), Aon PLC (NYSE:AON), Johnson Controls, Inc. (NYSE:JCI), and SYSCO Corporation (NYSE:SYY). This group of stocks’ market values match BX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ATVI | 64 | 4243407 | -4 |
| AON | 31 | 2565907 | 0 |
| JCI | 55 | 2833460 | 23 |
| SYY | 33 | 3556925 | 2 |
As you can see these stocks had an average of 46 hedge funds with bullish positions and the average amount invested in these stocks was $3.3 billion. That figure was a minor $404 million in BX’s case. Activision Blizzard, Inc. (NASDAQ:ATVI) is the most popular stock in this table. On the other hand Aon PLC (NYSE:AON) is the least popular one with only 31 bullish hedge fund positions. Blackstone Group LP (NYSE:BX) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ATVI might be a better candidate to consider a long position.
Disclosure: none.
