Is Monsanto Company (NYSE:MON) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Monsanto Company (NYSE:MON) was in 60 hedge funds’ portfolios at the end of the third quarter of 2015. Monsanto Company (NYSE:MON) has seen a decrease in activity from the world’s largest hedge funds recently. There were 64 hedge funds in our database with Monsanto Company (NYSE:MON) positions at the end of the previous quarter. At the end of this article, we will also compare Monsanto Company (NYSE:MON) to other stocks, including Kimberly Clark Corp (NYSE:KMB), Caterpillar Inc. (NYSE:CAT), and Capital One Financial Corp. (NYSE:COF) to get a better sense of its popularity.
Follow Monsanto Co W (NYSE:MON)
Follow Monsanto Co W (NYSE:MON)
If you’d ask most investors, hedge funds are seen as worthless, outdated financial vehicles of years past. While there are more than 8000 funds in operation today, our researchers look at the bigwigs of this club, about 700 funds. It is estimated that this group of investors watch over the majority of the smart money’s total asset base, and by tracking their top investments, Insider Monkey has figured out numerous investment strategies that have historically outperformed the market. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points per year for a decade in their back tests.
With all of this in mind, we’re going to go over the recent action surrounding Monsanto Company (NYSE:MON).
What have hedge funds been doing with Monsanto Company (NYSE:MON)?
At the end of the third quarter, a total of 60 of the hedge funds tracked by Insider Monkey were bullish on this stock, a decrease of 6% from the previous quarter. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Larry Robbins’s Glenview Capital has the number one position in Monsanto Company (NYSE:MON), worth close to $1.15 billion, accounting for 5.7% of its total 13F portfolio. Coming in second is SPO Advisory Corp, led by John H. Scully, holding a $314.6 million position; the fund has 5.3% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Alan Fournier’s Pennant Capital Management, Fir Tree, and Ricky Sandler’s Eminence Capital.
Since Monsanto Company (NYSE:MON) has faced a bearish sentiment from the smart money, we can see that there was a specific group of hedgies that slashed their positions entirely heading into Q4. Intriguingly, Jonathon Jacobson’s Highfields Capital Management sold off the largest investment of all the hedgies followed by Insider Monkey, worth about $143 million in call options., and Daniel S. Och’s OZ Management was right behind this move, as the fund cut about $85.3 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 4 funds heading into Q4.
Let’s check out hedge fund activity in other stocks similar to Monsanto Company (NYSE:MON). These stocks are Kimberly Clark Corp (NYSE:KMB), Caterpillar Inc. (NYSE:CAT), Capital One Financial Corp. (NYSE:COF), and China Telecom Corporation Limited (ADR) (NYSE:CHA). This group of stocks’ market caps is closest to Monsanto Company (NYSE:MON)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KMB | 34 | 1189525 | 3 |
| CAT | 40 | 1236703 | 10 |
| COF | 53 | 1466178 | 12 |
| CHA | 4 | 6297 | -1 |
As you can see, these stocks had an average of 33 hedge funds with bullish positions and the average amount invested in these stocks was $975 million. That figure was $3.05 billion in Monsanto Company (NYSE:MON)’s case. Capital One Financial Corp. (NYSE:COF) is the most popular stock in this table. On the other hand, China Telecom Corporation Limited (ADR) (NYSE:CHA) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks, Monsanto Company (NYSE:MON) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
