Hedge Funds Buy Energy Stocks: Too Early?
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
In this episode, Tracey is joined by Kevin Cook, Zacks Senior Strategist and Editor of Tactical Trader and Follow the Money Trader, where they discuss the fourth quarter Form 13f filings.
Money managers with more than $ 100 million under management are required to file Form 13f, which is a list of their positions, within 45 days of the end of each quarter with the Securities and Exchange Commission.
The deadline for the fourth quarter was February 16, 2016 so thousands of filings have been pouring in.
Tracey and Kevin noticed some interesting fourth quarter trades by some prominent managers.
Appaloosa Management’s David Tepper bought into Energy Transfer Partners and Kinder Morgan, two pipeline players.
Seth Klarman, at Baupost Group, has been a big believer in energy. He actually sold his position in Pioneer Natural Resources, which is an E&P, but continues to have Cheniere Energy (LNG –Snapshot Report) as one of his largest holdings.
The pipeline and terminal energy companies seem to be the place to hide out in.
But some managers have been diving into the riskier E&Ps. Barry Rosenstein at Jana Partners added new positions in Whiting Petroleum (WLL – Snapshot Report) and Oasis Petroleum (OAS –Snapshot Report).
Jana Partners is a value-oriented fund so Kevin and Tracey weren’t surprised that he was jumping in. Shares of both sunk in the fourth quarter as crude fell.
But did he get in too early? At the end of December, Whiting traded over $ 9 and Oasis traded above $ 7. They seemed cheap. But both are now trading in the $ 4s. Whiting has fallen about 50%.
In addition to energy, consumer names were also in favor with some managers.
Ricky Sandler at Eminence Capital has been in consumer names for over a year. One of his large holdings is Keurig Green Mountain (GMCR – Analyst Report) and he owns hotel stocks and Internet travel names like Tripadvisor (TRIP – Analyst Report).
But Kevin noticed a change in the types of consumer names he was buying compared to the first quarter of 2015. Did Eminence get more conservative by the fourth quarter or less?
Tune in to this week’s podcast to find out what else you can learn from the stock moves of the big money managers.
– See more at: http://www.zacks.com/stock/news/207558/hedge-funds-buy-energy-stocks-too-early#sthash.Djok7mJQ.dpuf