Is BreitBurn Energy Partners L.P. (BBEP) A Good Stock To Buy?

The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors endured a torrid quarter, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards BreitBurn Energy Partners L.P. (NASDAQ:BBEP).

BreitBurn Energy Partners L.P. (NASDAQ:BBEP) has seen a decrease in enthusiasm from smart money in recent months. BBEP was in 5 hedge funds’ portfolios at the end of the third quarter of 2015. There were 6 hedge funds in our database with BBEP holdings at the end of the previous quarter. 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 Medley Capital Corp (NYSE:MCC), Centrue Financial Corp (PINK:TRUE), and AK Steel Holding Corporation (NYSE:AKS) to gather more data points.

If you’d ask most stock holders, hedge funds are perceived as unimportant, outdated financial tools of yesteryear. While there are greater than 8000 funds trading at present, Our experts hone in on the elite of this club, around 700 funds. Most estimates calculate that this group of people manage most of all hedge funds’ total capital, and by keeping an eye on their best stock picks, Insider Monkey has come up with numerous investment strategies that have historically beaten the market. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points annually for a decade in their back tests.

Keeping this in mind, let’s take a look at the fresh action encompassing BreitBurn Energy Partners L.P. (NASDAQ:BBEP).

How have hedgies been trading BreitBurn Energy Partners L.P. (NASDAQ:BBEP)?

At the end of the third quarter, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -17% from the previous quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Michael Kao’s Akanthos Capital has the number one position in BreitBurn Energy Partners L.P. (NASDAQ:BBEP), worth close to $3.2 million, corresponding to 4.9% of its total 13F portfolio. The second largest stake is held by Anchorage Advisors, led by Kevin Michael Ulrich and Anthony Davis, holding a $0.7 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other peers that hold long positions consist of Ken Griffin’s Citadel Investment Group, Matthew Hulsizer’s PEAK6 Capital Management and Matthew Lindenbaum’s Basswood Capital.

Due to the fact that BreitBurn Energy Partners L.P. (NASDAQ:BBEP) has faced bearish sentiment from the smart money, it’s easy to see that there was a specific group of funds that slashed their positions entirely by the end of the third quarter. At the top of the heap, Ken Griffin’s Citadel Investment Group dropped the largest position of all the hedgies followed by Insider Monkey, worth an estimated $0.3 million in stock, and George Hall’s Clinton Group was right behind this move, as the fund sold off about $0.1 million worth. These moves are important to note, as total hedge fund interest was cut by 1 funds by the end of the third quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as BreitBurn Energy Partners L.P. (NASDAQ:BBEP) but similarly valued. We will take a look at Medley Capital Corp (NYSE:MCC), Centrue Financial Corp (PINK:TRUE), AK Steel Holding Corporation (NYSE:AKS), and Ascendis Pharma A/S (NASDAQ:ASND). This group of stocks’ market values are closest to BBEP’s market value.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $56 million. That figure was just $5 million in BBEP’s case. AK Steel Holding Corporation (NYSE:AKS) is the most popular stock in this table, while Medley Capital Corp (NYSE:MCC) is the least popular one with only 4 bullish hedge fund positions. BreitBurn Energy Partners L.P. (NASDAQ:BBEP) 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 AKS might be a better candidate to consider a long position.