Should You Avoid Teekay LNG Partners L.P. (TGP)?

Teekay LNG Partners L.P. (NYSE:TGP) was in 5 hedge funds’ portfolio at the end of the fourth quarter of 2012. TGP has experienced a decrease in enthusiasm from smart money recently. There were 6 hedge funds in our database with TGP positions at the end of the previous quarter.

In the 21st century investor’s toolkit, there are a multitude of methods market participants can use to monitor the equity markets. Two of the most underrated are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite money managers can outpace the S&P 500 by a solid amount (see just how much).

Equally as important, positive insider trading sentiment is another way to break down the financial markets. As the old adage goes: there are plenty of incentives for an insider to sell shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several empirical studies have demonstrated the useful potential of this tactic if shareholders know what to do (learn more here).

Consequently, it’s important to take a gander at the key action surrounding Teekay LNG Partners L.P. (NYSE:TGP).

How are hedge funds trading Teekay LNG Partners L.P. (NYSE:TGP)?

At the end of the fourth quarter, a total of 5 of the hedge funds we track were bullish in this stock, a change of -17% from the previous quarter. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their holdings substantially.

Of the funds we track, Jim Simons’s Renaissance Technologies had the most valuable position in Teekay LNG Partners L.P. (NYSE:TGP), worth close to $5.9 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is Two Sigma Advisors, managed by John Overdeck and David Siegel, which held a $2.4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Leon Cooperman’s Omega Advisors, Israel Englander’s Millennium Management and Ken Griffin’s Citadel Investment Group.

Since Teekay LNG Partners L.P. (NYSE:TGP) has witnessed a declination in interest from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of money managers that elected to cut their full holdings last quarter. It’s worth mentioning that Cliff Asness’s AQR Capital Management dumped the biggest stake of all the hedgies we monitor, worth close to $0.3 million in stock. These transactions are important to note, as total hedge fund interest was cut by 1 funds last quarter.

Insider trading activity in Teekay LNG Partners L.P. (NYSE:TGP)

Insider buying is particularly usable when the company in focus has experienced transactions within the past six months. Over the last six-month time period, Teekay LNG Partners L.P. (NYSE:TGP) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s also examine hedge fund and insider activity in other stocks similar to Teekay LNG Partners L.P. (NYSE:TGP). These stocks are Kirby Corporation (NYSE:KEX), Teekay Offshore Partners L.P. (NYSE:TOO), Teekay Corporation (NYSE:TK), Tidewater Inc. (NYSE:TDW), and Golar LNG Limited (USA) (NASDAQ:GLNG). This group of stocks belong to the shipping industry and their market caps resemble TGP’s market cap.

With the returns exhibited by our strategies, retail investors must always watch hedge fund and insider trading activity, and Teekay LNG Partners L.P. (NYSE:TGP) is an important part of this process.

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