Magellan Midstream Partners, L.P. (MMP): Hedge Funds Aren’t Crazy About It, Insider Sentiment Unchanged

In the 21st century investor’s toolkit, there are many metrics investors can use to track publicly traded companies. A duo of the most useful are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite investment managers can trounce the broader indices by a healthy margin (see just how much).

Equally as necessary, positive insider trading sentiment is another way to look at the financial markets. Just as you’d expect, there are a number of reasons for an insider to cut shares of his or her company, but just one, very simple reason why they would behave bullishly. Several academic studies have demonstrated the market-beating potential of this strategy if “monkeys” know where to look (learn more here).

Furthermore, it’s important to analyze the recent info for Magellan Midstream Partners, L.P. (NYSE:MMP).

How have hedgies been trading Magellan Midstream Partners, L.P. (NYSE:MMP)?

At the end of the second quarter, a total of 8 of the hedge funds we track were long in this stock, a change of -27% from the previous quarter. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes significantly.

Out of the hedge funds we follow, Osterweis Capital Management, managed by John Osterweis, holds the largest position in Magellan Midstream Partners, L.P. (NYSE:MMP). Osterweis Capital Management has a $89 million position in the stock, comprising 3.3% of its 13F portfolio. On Osterweis Capital Management’s heels is Jim Simons of Renaissance Technologies, with a $27 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other peers that hold long positions include Matthew Hulsizer’s PEAK6 Capital Management, Richard Driehaus’s Driehaus Capital and Russell Lucas’s Lucas Capital Management.

Since Magellan Midstream Partners, L.P. (NYSE:MMP) has experienced bearish sentiment from the top-tier hedge fund industry, it’s safe to say that there was a specific group of fund managers that decided to sell off their positions entirely at the end of the second quarter. It’s worth mentioning that Chuck Royce’s Royce & Associates sold off the biggest stake of the 450+ funds we monitor, valued at an estimated $39.4 million in stock. Michael Messner’s fund, Seminole Capital (Investment Mgmt), also dropped its stock, about $4.7 million worth. These transactions are interesting, as aggregate hedge fund interest fell by 3 funds at the end of the second quarter.

How have insiders been trading Magellan Midstream Partners, L.P. (NYSE:MMP)?

Legal insider trading, particularly when it’s bullish, is most useful when the primary stock in question has seen transactions within the past half-year. Over the last half-year time frame, Magellan Midstream Partners, L.P. (NYSE:MMP) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to Magellan Midstream Partners, L.P. (NYSE:MMP). These stocks are Pembina Pipeline Corp (NYSE:PBA), Energy Transfer Partners LP (NYSE:ETP), El Paso Pipeline Partners, L.P. (NYSE:EPB), Kinder Morgan Management, LLC (NYSE:KMR), and Oneok Partners LP (NYSE:OKS). This group of stocks belong to the oil & gas pipelines industry and their market caps match MMP’s market cap.