Did Institutional Investors Turn Their Back on BP During Q2? Not Even Close





BP Company LogoThe second quarter of 2010 started like any other for BP plc (BP).

On April 1st, 2010 (the first day of the second quarter), BP opened at $57.45 per share.

By June 30th, 2010 (the end of the second quarter), BP had fallen all the way to $28.88.

BP, which was seen as one of the world's most rock solid equity holdings, had lost more than half of its value in less than three months, wiping out an obscene amount of market capitalization during that time.

You surely know the reason as to why BP lost so much of its value during the second quarter. On April 20th, 2010, there was an explosion on the Deepwater Horizon that killed 11 crewmen. Two days later, the Deepwater Horizon sank, resulting in a gushing oil well that ended up creating one of the biggest environment calamities in the history of the modern world. BP was under constant fire for approximately three months as oil continued to gush into the Gulf of Mexico.

So - did institutional investors cut their ties with the company thanks to the Gulf of Mexico oil spill?

Not even close.

During the second quarter of 2010, this site tracked the buys and sells of 96 of the largest institutional investors in the world.

After compiling the results in our database, we quickly brought up BP to see how institutional investors had reacted to the under fire company during the second quarter. BP is a very big holding for a number of these 96 institutional investors, so we wanted to see how these funds had reacted to one of their largest holdings having such a tough quarter.

The results?

To start, 7 of the 96 institutional investors in our database decided to open NEW positions in BP during the second quarter. They were:

Renaissance Technologies LLC - 7,240,500 shares
Fairholme Capital Management LLC - 9,435,900 shares
Fir Tree INC - 1,630,000 shares
Eton Park Capital Management LP - 1,275,000 shares
Chesapeake Partners Management Co INC/MD - 50,000 shares
DE Shaw & Co Inc - 16,600 shares
First Eagle Investment Management, LLC - 30,264 shares

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Ok, those were the new buys. Surely there were plenty of outright sells though?

Just five:

Aletheia Research & Management, Inc - 185,489 shares
Defiance Asset Management LLC - 87,975 shares
Caxton Associates LP - 38,472 shares
Millennium Management LLC - 62,219 shares
Fortis Investment Management - 4,321 shares

Five sells but they were all fairly small in size, especially when compared to some of the new buys during the second quarter.

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Now, let's look at one more thing - changes to existing positions during the second quarter.

Of the 96 funds in our database during Q2, 4 decided to add to their existing positions in BP, while 3 decided to reduce existing positions.

The four investors who chose to increase their existing positions in BP were:

FMR LLC - 10,965,149 shares
Adage Capital Partners GP LLC - 3,277,000 shares
SAC Capital Advisors LP - 2,929,791 shares
Citadel Advisors LLC - 1,068,992 shares

The three investors who chose to reduce their positions in BP during Q2 were:

Goldman Sachs Group Inc, -996,207 shares
Two Sigma Investments LLC, -219,486 shares
Gateway Investment Advisers LLC, -64 shares

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The trend was pretty clear during the second quarter - institutional investors saw BP's troubles as a buying opportunity and not a reason to exit their positions.

Source: Manuel Fund Report




Filed under: General Market News

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