The worries about the election and the ongoing uncertainty about the path of interest-rate increases have been keeping investors on the sidelines. Of course, most hedge funds and other asset managers have been underperforming main stock market indices since the middle of 2015. Interestingly though, smaller-cap stocks registered their best performance relative to the large-capitalization stocks since the end of the June quarter, suggesting that this may be the best time to take a cue from their stock picks. In fact, the Russell 2000 Index gained more than 15% since the beginning of the third quarter, while the Standard and Poor’s 500 benchmark returned less than 6%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Federal Agricultural Mortgage Corp. (NYSE:AGM).
Federal Agricultural Mortgage Corp. (NYSE:AGM) has experienced an increase in hedge fund interest of late. AGM was in 8 hedge funds’ portfolios at the end of the third quarter of 2016. There were 6 hedge funds in our database with AGM holdings at the end of the previous quarter. At the end of this article we will also compare AGM to other stocks including Suffolk Bancorp (NYSE:SCNB), Lindblad Expeditions Holdings Inc (NASDAQ:LIND), and DXP Enterprises Inc (NASDAQ:DXPE) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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What does the smart money think about Federal Agricultural Mortgage Corp. (NYSE:AGM)?
At the end of the third quarter, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a gain of 33% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards AGM over the last 5 quarters. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Cliff Asness’ AQR Capital Management holds the most valuable position in Federal Agricultural Mortgage Corp. (NYSE:AGM). AQR Capital Management has a $8 million position in the stock. Coming in second is Renaissance Technologies, one of the largest hedge funds in the world, which holds a $5.8 million position. Some other members of the smart money with similar optimism include Chuck Royce’s Royce & Associates, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Now, specific money managers have jumped into Federal Agricultural Mortgage Corp. (NYSE:AGM) headfirst. Arrowstreet Capital created the most valuable position in Federal Agricultural Mortgage Corp. (NYSE:AGM) which had $1.2 million invested in the company at the end of the quarter. Peter Algert and Kevin Coldiron’s Algert Coldiron Investors also made a $0.2 million investment in the stock during the quarter. The only other fund with a brand new AGM position is Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Federal Agricultural Mortgage Corp. (NYSE:AGM) but similarly valued. These stocks are Suffolk Bancorp (NYSE:SCNB), Lindblad Expeditions Holdings Inc (NASDAQ:LIND), DXP Enterprises Inc (NASDAQ:DXPE), and AAC Holdings Inc (NYSE:AAC). This group of stocks’ market valuations are similar to AGM’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SCNB | 7 | 45085 | -4 |
| LIND | 11 | 32206 | -2 |
| DXPE | 9 | 55026 | 3 |
| AAC | 6 | 46564 | -1 |
As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $45 million. That figure was $17 million in AGM’s case. Lindblad Expeditions Holdings Inc (NASDAQ:LIND) is the most popular stock in this table. On the other hand AAC Holdings Inc (NYSE:AAC) is the least popular one with only 6 bullish hedge fund positions. Federal Agricultural Mortgage Corp. (NYSE:AGM) 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 LIND might be a better candidate to consider taking a long position in.
Disclosure: None
