BP plc (ADR) (NYSE:BP) announced on Thursday that it will pay a settlement fee of $18.7 billion over the Deepwater Horizon Spill claims. BP plc said that it would pay the settlement amount over a period of 18 years and this would settle all the US federal and state claims from the oil spill accident in April 2010. According to the federal authorities this is their biggest settlement with a corporation. According to BP plc (ADR) (NYSE:BP) Chairman Carl-Henric Svanberg this agreement resolves the company’s long-running legal issues and gives clarity on costs and creates a certainty of payments for all concerned parties. BP plc (ADR) (NYSE:BP)’s stock has rallied soon after the news about oil spill settlement broke out and gained around 6%. What do hedge funds think about BP and is it a good buy at the moment?
Hedge funds seem to be not very bullish on BP plc (ADR) (NYSE:BP), as the number of hedge funds holding long positions reduced to 37 at the end of March, from 39 at the end of 2014, while the aggregate value capital held by these hedge funds went down by 6.5% to $1.18 billion at the end of the first trimester. Considering the fact that the stock has gained around 1.5% during the January – March period, we can say that the hedge funds were not favoring this stock during this period.
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What have hedge funds been doing with BP plc (ADR) (NYSE:BP)?
According to Insider Monkey’s database, Richard S. Pzena‘s Pzena Investment Management holds the most valuable position in BP plc (ADR) (NYSE:BP), which contains 11.93 million shares valued at $466.7 million at the end of March, comprising 2.6% of its 13F portfolio. On the second spot is Bill & Melinda Gates Foundation Trust, managed by Michael Larson, with 7.4 million shares.
Since BP plc (ADR) (NYSE:BP) has witnessed a bearish sentiment from the aggregate hedge fund industry, It’s important to look at investors that closed their positions during the first three months of 2015. Marc Lisker, Glenn Fuhrman and John Phelan’s MSD Management dropped the largest stake by selling 2.1 million shares. Benjamin A. Smith’s fund, Laurion Capital Management, also sold off 1.05 million shares in the first three months.
BP plc (ADR) (NYSE:BP) marked its best trading session in the last six months earlier today. Even though the stock keeps advancing on the news about the oil spill settlement. We still need to see how the hedge fund sentiment has changed in the second quarter, and whether investors will become more bullish on the back of this development, but for now due to reduced uncertainty, the stock is worth giving a shot.
Disclosure: None
