Is SemGroup Corp (NYSE:SEMG) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to find the latest market-moving information.
SemGroup Corp (NYSE:SEMG) investors should be aware of an increase in support from the world’s most elite money managers lately. SEMG was in 26 hedge funds’ portfolios at the end of September. There were 23 hedge funds in our database with SEMG positions 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 Patterson-UTI Energy, Inc. (NASDAQ:PTEN), Sterling Bancorp (NYSE:STL), and Diebold Incorporated (NYSE:DBD) to gather more data points.
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Now, we’re going to take a glance at the recent action surrounding SemGroup Corp (NYSE:SEMG).
Hedge fund activity in SemGroup Corp (NYSE:SEMG)
At Q3’s end, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Iridian Asset Management, managed by David Cohen and Harold Levy, holds the biggest position in SemGroup Corp (NYSE:SEMG). Iridian Asset Management has a $195.4 million position in the stock, comprising 1.7% of its 13F portfolio. The second largest stake is held by Citadel Investment Group, led by Ken Griffin, holding a $54.7 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other professional money managers that are bullish comprise Robert Pohly’s Samlyn Capital, Andrew Immerman and Jeremy Schiffman’s Palestra Capital Management and James Dondero’s Highland Capital Management.
Consequently, key money managers were breaking ground themselves. Soroban Capital Partners, managed by Eric W. Mandelblatt, established the most outsized position in SemGroup Corp (NYSE:SEMG). Soroban Capital Partners had $6.2 million invested in the company at the end of the quarter. Michael Reeber’s Andalusian Capital Partners also initiated a $3.2 million position during the quarter. The other funds with brand new SEMG positions are Sander Gerber’s Hudson Bay Capital Management, Jonathan Barrett and Paul Segal’s Luminus Management, and Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as SemGroup Corp (NYSE:SEMG) but similarly valued. These stocks are Patterson-UTI Energy, Inc. (NASDAQ:PTEN), Sterling Bancorp (NYSE:STL), Diebold Incorporated (NYSE:DBD), and Tootsie Roll Industries, Inc. (NYSE:TR). All of these stocks’ market caps resemble SEMG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PTEN | 25 | 345564 | -10 |
| STL | 21 | 245040 | 1 |
| DBD | 10 | 267619 | -5 |
| TR | 9 | 79318 | 0 |
As you can see these stocks had an average of 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $234 million. That figure was $383 million in SEMG’s case. Patterson-UTI Energy, Inc. (NASDAQ:PTEN) is the most popular stock in this table. On the other hand Tootsie Roll Industries, Inc. (NYSE:TR) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks SemGroup Corp (NYSE:SEMG) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
