Should You Avoid Williams Partners L.P. (WPZ)?

Williams Partners L.P. (NYSE:WPZ) shareholders have witnessed a decrease in hedge fund sentiment recently.

In today’s marketplace, there are many gauges shareholders can use to analyze their holdings. Some of the most innovative are hedge fund and insider trading sentiment. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the top hedge fund managers can outperform the S&P 500 by a solid amount (see just how much).

Equally as key, positive insider trading activity is another way to break down the stock market universe. Obviously, there are lots of incentives for an executive to downsize shares of his or her company, but only one, very simple reason why they would buy. Plenty of academic studies have demonstrated the useful potential of this tactic if investors understand where to look (learn more here).

Now, we’re going to take a peek at the key action encompassing Williams Partners L.P. (NYSE:WPZ).

What have hedge funds been doing with Williams Partners L.P. (NYSE:WPZ)?

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 an “upper tier” of noteworthy hedge fund managers who were boosting their holdings meaningfully.

According to our comprehensive database, Jean-Marie Eveillard’s First Eagle Investment Management had the most valuable position in Williams Partners L.P. (NYSE:WPZ), worth close to $5.1 million, comprising less than 0.1%% of its total 13F portfolio. Coming in second is Driehaus Capital, managed by Richard Driehaus, which held a $2.6 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other peers with similar optimism include John Zaro’s Bourgeon Capital, Cliff Asness’s AQR Capital Management and Ken Griffin’s Citadel Investment Group.

Judging by the fact that Williams Partners L.P. (NYSE:WPZ) has faced a declination in interest from the smart money, we can see that there exists a select few money managers that decided to sell off their positions entirely at the end of the year. Intriguingly, Jim Simons’s Renaissance Technologies dumped the largest position of all the hedgies we monitor, totaling an estimated $22.6 million in stock., and Robert B. Gillam of McKinley Capital Management was right behind this move, as the fund cut about $0.6 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 1 funds at the end of the year.

How have insiders been trading Williams Partners L.P. (NYSE:WPZ)?

Insider buying is best served when the primary stock in question has experienced transactions within the past six months. Over the last half-year time period, Williams Partners L.P. (NYSE:WPZ) has seen 1 unique insiders buying, and 1 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Williams Partners L.P. (NYSE:WPZ). These stocks are Westlake Chemical Corporation (NYSE:WLK), Sigma-Aldrich Corporation (NASDAQ:SIAL), LyondellBasell Industries NV (NYSE:LYB), Sherwin-Williams Company (NYSE:SHW), and PPG Industries, Inc. (NYSE:PPG). This group of stocks belong to the specialty chemicals industry and their market caps match WPZ’s market cap.

With the returns exhibited by the aforementioned strategies, everyday investors must always watch hedge fund and insider trading activity, and Williams Partners L.P. (NYSE:WPZ) shareholders fit into this picture quite nicely.

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