Should You Avoid Energy Transfer Partners LP (ETP)?

Should Energy Transfer Partners LP (NYSE:ETP) investors track the following data?

To the average investor, there are plenty of indicators investors can use to watch their holdings. Some of the best are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top hedge fund managers can outperform the broader indices by a healthy amount (see just how much).

Just as crucial, optimistic insider trading activity is another way to look at the world of equities. As the old adage goes: there are a variety of incentives for a corporate insider to downsize shares of his or her company, but just one, very obvious reason why they would buy. Several academic studies have demonstrated the useful potential of this tactic if you understand what to do (learn more here).

Thus, it’s important to discuss the newest info surrounding Energy Transfer Partners LP (NYSE:ETP).

What have hedge funds been doing with Energy Transfer Partners LP (NYSE:ETP)?

Heading into Q3, a total of 9 of the hedge funds we track were long in this stock, a change of -31% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their stakes substantially.

According to our 13F database, Jim Simons’s Renaissance Technologies had the biggest position in Energy Transfer Partners LP (NYSE:ETP), worth close to $12.4 million, accounting for less than 0.1%% of its total 13F portfolio. On Renaissance Technologies’s heels is Dmitry Balyasny of Balyasny Asset Management, with a $8.3 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers that are bullish include Matt McLennan’s First Eagle Investment Management, and Matthew Hulsizer’s PEAK6 Capital Management.

As Energy Transfer Partners LP (NYSE:ETP) has witnessed bearish sentiment from the smart money’s best and brightest, we can see that there exists a select few fund managers who sold off their entire stakes at the end of the second quarter. Intriguingly, Daniel S. Och’s OZ Management cut the largest position of the “upper crust” of funds we watch, worth about $86.4 million in stock. Richard Driehaus’s fund, Driehaus Capital, also said goodbye to its stock, about $13.3 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 4 funds at the end of the second quarter.

How have insiders been trading Energy Transfer Partners LP (NYSE:ETP)?

Bullish insider trading is at its handiest when the primary stock in question has seen transactions within the past six months. Over the latest half-year time period, Energy Transfer Partners LP (NYSE:ETP) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll also examine the relationship between both of these indicators in other stocks similar to Energy Transfer Partners LP (NYSE:ETP). These stocks are Spectra Energy Corp. (NYSE:SE), Magellan Midstream Partners, L.P. (NYSE:MMP), Plains All American Pipeline, L.P. (NYSE:PAA), Oneok Partners LP (NYSE:OKS), and Energy Transfer Equity, L.P. (NYSE:ETE). This group of stocks are in the oil & gas pipelines industry and their market caps are similar to ETP’s market cap.