Recently, Michael Santoli (Barron's, July 19 2010) posted an article suggesting that BP is clearly undervalued and citing a number of bullish hedge fund types that bought the stock "down to its low near $27 per share".
Both of the hedge funds (buying BP) cited in the Santoli article appear to be at significant losses on their initial investments. According to Mr. Santoli, DLS Capital began buying its stake within a month of the spill, during which the stock traded at an average of $47 per share (-26%). Mr. Santoli also states that T2 Partners was a buyer of BP "down to its low near $27 a share". However, Whitney Tilson (of T2 Partners) was advertising his significant stake in BP as early as June 8th, 2010. Prior to June 8th, BP stock had not traded below $36/share. Based on Mr. Tilson's statements on CNBC, he had already built a significant position at higher prices. While it is possible that Mr. Tilson "averaged his loser" on BP down to $27/share, it seems likely he is at a mark-to-market loss on a large portion of his stake.
The article seemed to imply that Tilson was a buyer largely at the low near $27/share, which does not seem to be the case (even if his opinion is still meritworthy).
Casual readers might second-guess the article if they knew that both bulls on the stock had incurred significant volatility and mark-to-market losses from their initial investment price. For many speculators after the spill-date, current prices represent a cold-eyed statement that they need BP stock price to rise back to their cost-basis.