Is Cheniere Energy Partners LP Holdings LLC (CQH) Going to Burn These Hedge Funds?

You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make a proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.

Hedge fund interest in Cheniere Energy Partners LP Holdings LLC (NYSEMKT:CQH) shares was flat at the end of last quarter. This is usually a negative indicator. 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 Penske Automotive Group, Inc. (NYSE:PAG), Brown & Brown, Inc. (NYSE:BRO), and GameStop Corp. (NYSE:GME) to gather more data points.

In the 21st century investor’s toolkit there are numerous signals investors have at their disposal to evaluate publicly traded companies. Two of the most useful signals are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the best investment managers can beat the market by a significant amount (see the details here).

Keeping this in mind, let’s take a look at the key action encompassing Cheniere Energy Partners LP Holdings LLC (NYSEMKT:CQH).

What does the smart money think about Cheniere Energy Partners LP Holdings LLC (NYSEMKT:CQH)?

At the end of the third quarter, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Stuart J. Zimmer’s Zimmer Partners has the biggest position in Cheniere Energy Partners LP Holdings LLC (NYSEMKT:CQH), worth close to $114.2 million, amounting to 8.7% of its total 13F portfolio. Sitting at the No. 2 spot is Anchorage Advisors, managed by Kevin Michael Ulrich and Anthony Davis, which holds a $91.3 million position; the fund has 3% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism include James Dinan’s York Capital Management, Alan Fournier’s Pennant Capital Management and Bruce J. Richards and Louis Hanover’s Marathon Asset Management.

Since Cheniere Energy Partners LP Holdings LLC (NYSEMKT:CQH) has experienced a decline in interest from hedge fund managers, it’s safe to say that there lies a certain “tier” of hedge funds that slashed their entire stakes heading into Q4. Interestingly, Tom Sandell’s Sandell Asset Management dropped the largest stake of the “upper crust” of funds tracked by Insider Monkey, comprising an estimated $13.4 million in stock, and John Reilly’s South Ferry Capital Management was right behind this move, as the fund sold off about $3.2 million worth of shares. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s also examine hedge fund activity in other stocks similar to Cheniere Energy Partners LP Holdings LLC (NYSEMKT:CQH). These stocks are Penske Automotive Group, Inc. (NYSE:PAG), Brown & Brown, Inc. (NYSE:BRO), GameStop Corp. (NYSE:GME), and Jabil Circuit, Inc. (NYSE:JBL). This group of stocks’ market values match CQH’s market value.

As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $354 million. That figure was $440 million in CQH’s case. GameStop Corp. (NYSE:GME) is the most popular stock in this table. On the other hand Brown & Brown, Inc. (NYSE:BRO) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks Cheniere Energy Partners LP Holdings LLC (NYSEMKT:CQH) is even less popular than BRO. 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.