World-class money managers like Bill Ackman and Barry Rosenstein only invest their wealthy clients’ money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. It’s not surprising then that they generate their biggest returns from these stocks and invest more of their money in these stocks on average than other investors. It’s also not surprising then that we pay close attention to these picks ourselves and have built a market-beating investment strategy around them.
Is MPLX LP (NYSE:MPLX) a buy, sell, or hold? The smart money is in an optimistic mood. The number of bullish hedge fund bets improved by 4 lately. At the end of this article we will also compare MPLX to other stocks, including American Eagle Outfitters (NYSE:AEO), Industrias Bachoco, S.A.B. de C.V. (ADR) (NYSE:IBA), and TC Pipelines, LP (NYSE:TCP) to get a better sense of its popularity.
If you’d ask most investors, hedge funds are seen as underperforming, old investment vehicles of the past. While there are greater than 8000 funds in operation at present, Our experts hone in on the leaders of this club, approximately 700 funds. Most estimates calculate that this group of people administer the lion’s share of the smart money’s total asset base, and by paying attention to their best equity investments, Insider Monkey has uncovered a few investment strategies that have historically outrun Mr. Market. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points annually for a decade in their back tests.
Now, let’s check out the key action encompassing MPLX LP (NYSE:MPLX).
Hedge fund activity in MPLX LP (NYSE:MPLX)
At the end of the third quarter, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of 44% from one quarter earlier. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies holds the most valuable position in MPLX LP (NYSE:MPLX). Renaissance Technologies has a $12.3 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Israel Englander’s Millennium Management, with a $7.5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other members of the smart money that are bullish consist of Stuart J. Zimmer’s Zimmer Partners and Millennium Management Subsidiary’s Green Arrow Capital Management.
As industrywide interest jumped, key money managers have jumped into MPLX LP (NYSE:MPLX) headfirst. Zimmer Partners assembled the most outsized position in MPLX LP (NYSE:MPLX). Zimmer Partners had $4.8 million invested in the company at the end of the quarter. George Hall’s Clinton Group also initiated a $4.4 million position during the quarter. The other funds with brand new MPLX positions are David Atterbury’s Whetstone Capital Advisors, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Richard Driehaus’ Driehaus Capital.
Let’s check out hedge fund activity in other stocks similar to MPLX LP (NYSE:MPLX). We will take a look at American Eagle Outfitters (NYSE:AEO), Industrias Bachoco, S.A.B. de C.V. (ADR) (NYSE:IBA), TC Pipelines, LP (NYSE:TCP), and RR Donnelley & Sons Co (NASDAQ:RRD). This group of stocks’ market caps are closest to MPLX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AEO | 40 | 494214 | 4 |
| IBA | 5 | 50018 | -1 |
| TCP | 4 | 5675 | 1 |
| RRD | 25 | 111669 | 4 |
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $165 million. That figure was just $50 million in MPLX’s case. American Eagle Outfitters (NYSE:AEO) is the most popular stock in this table, while TC Pipelines, LP (NYSE:TCP) is the least popular one with only 4 bullish hedge fund positions. MPLX LP (NYSE:MPLX) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard AEO might be a better candidate to consider a long position.
