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 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.
Is Enbridge Energy Management, L.L.C. (NYSE:EEQ) a great stock to buy now? Money managers are surely turning bullish. The number of long hedge fund positions that are disclosed in regulatory 13F filings increased by 1 in recent months. There were 5 hedge funds in our database with EEQ 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 Franks International NV (NYSE:FI), Mueller Water Products, Inc. (NYSE:MWA), and Artisan Partners Asset Management Inc (NYSE:APAM) to gather more data points.
Follow Enbridge Energy Management L L C (NYSE:EEQ)
Follow Enbridge Energy Management L L C (NYSE:EEQ)
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
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With all of this in mind, let’s take a look at the recent action encompassing Enbridge Energy Management, L.L.C. (NYSE:EEQ).
How are hedge funds trading Enbridge Energy Management, L.L.C. (NYSE:EEQ)?
Heading into the fourth quarter of 2016, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from one quarter earlier. On the other hand, there were a total of 3 hedge funds with a bullish position in EEQ at the beginning of this year. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, D E Shaw, one of the biggest hedge funds in the world has the most valuable position in Enbridge Energy Management, L.L.C. (NYSE:EEQ), worth close to $11.2 million, corresponding to less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, led by Ken Griffin, holding a $8.8 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors with similar optimism contain Jim Simons’s Renaissance Technologies, Russell Lucas’s Lucas Capital Management and Israel Englander’s Millennium Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
As one would reasonably expect, key money managers have jumped into Enbridge Energy Management, L.L.C. (NYSE:EEQ) headfirst. Springbok Capital, led by Gavin Saitowitz and Cisco J. del Valle, created the most valuable position in Enbridge Energy Management, L.L.C. (NYSE:EEQ). Springbok Capital had $0 million invested in the company at the end of the quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Enbridge Energy Management, L.L.C. (NYSE:EEQ) but similarly valued. We will take a look at Franks International NV (NYSE:FI), Mueller Water Products, Inc. (NYSE:MWA), Artisan Partners Asset Management Inc (NYSE:APAM), and Suburban Propane Partners LP (NYSE:SPH). This group of stocks’ market caps resemble EEQ’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FI | 12 | 35828 | 2 |
| MWA | 20 | 180032 | 0 |
| APAM | 10 | 94947 | -1 |
| SPH | 4 | 6526 | -1 |
As you can see these stocks had an average of 11.5 hedge funds with bullish positions and the average amount invested in these stocks was $79 million. That figure was $24 million in EEQ’s case. Mueller Water Products, Inc. (NYSE:MWA) is the most popular stock in this table. On the other hand Suburban Propane Partners LP (NYSE:SPH) is the least popular one with only 4 bullish hedge fund positions. Enbridge Energy Management, L.L.C. (NYSE:EEQ) 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 MWA might be a better candidate to consider taking a long position in.
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Disclosure: None
