The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. In this article we look at how hedge funds traded The Mosaic Company (NYSE:MOS) and determine whether the smart money was really smart about this stock.
Is The Mosaic Company (NYSE:MOS) undervalued? Prominent investors were in a bullish mood. The number of bullish hedge fund bets advanced by 3 in recent months. The Mosaic Company (NYSE:MOS) was in 32 hedge funds’ portfolios at the end of June. The all time high for this statistics is 39. Our calculations also showed that MOS isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). There were 29 hedge funds in our database with MOS holdings at the end of March.
Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most market participants, hedge funds are perceived as slow, outdated financial tools of the past. While there are more than 8000 funds with their doors open at the moment, Our experts hone in on the aristocrats of this group, about 850 funds. It is estimated that this group of investors have their hands on the majority of all hedge funds’ total asset base, and by paying attention to their best picks, Insider Monkey has deciphered a few investment strategies that have historically outrun the market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 34% since February 2017 (through August 17th) even though the market was up 53% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Donald Sussman of Paloma Partners
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, this “mom” trader turned $2000 into $2 million within 2 years. So, we are checking out her best trade idea of the month. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to check out the latest hedge fund action regarding The Mosaic Company (NYSE:MOS).
What have hedge funds been doing with The Mosaic Company (NYSE:MOS)?
Heading into the third quarter of 2020, a total of 32 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from the previous quarter. By comparison, 28 hedge funds held shares or bullish call options in MOS a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Adage Capital Management held the most valuable stake in The Mosaic Company (NYSE:MOS), which was worth $127.5 million at the end of the third quarter. On the second spot was Slate Path Capital which amassed $98.3 million worth of shares. Citadel Investment Group, D E Shaw, and Arrowstreet Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Slate Path Capital allocated the biggest weight to The Mosaic Company (NYSE:MOS), around 5.8% of its 13F portfolio. East Side Capital (RR Partners) is also relatively very bullish on the stock, earmarking 2.79 percent of its 13F equity portfolio to MOS.
Consequently, key hedge funds were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, created the largest position in The Mosaic Company (NYSE:MOS). Arrowstreet Capital had $45.2 million invested in the company at the end of the quarter. Renaissance Technologies also made a $3 million investment in the stock during the quarter. The other funds with brand new MOS positions are Michael Cowley’s Sandbar Asset Management, Greg Poole’s Echo Street Capital Management, and Donald Sussman’s Paloma Partners.
Let’s check out hedge fund activity in other stocks similar to The Mosaic Company (NYSE:MOS). We will take a look at Kemper Corporation (NYSE:KMPR), Owl Rock Capital Corporation (NYSE:ORCC), New York Community Bancorp, Inc. (NYSE:NYCB), Flowers Foods, Inc. (NYSE:FLO), Nutanix, Inc. (NASDAQ:NTNX), HollyFrontier Corporation (NYSE:HFC), and CRISPR Therapeutics AG (NASDAQ:CRSP). All of these stocks’ market caps are closest to MOS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KMPR | 16 | 37427 | 3 |
| ORCC | 15 | 136062 | 4 |
| NYCB | 28 | 221363 | 6 |
| FLO | 24 | 269421 | -3 |
| NTNX | 20 | 584504 | -9 |
| HFC | 27 | 273880 | 3 |
| CRSP | 31 | 296881 | 0 |
| Average | 23 | 259934 | 0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $260 million. That figure was $450 million in MOS’s case. CRISPR Therapeutics AG (NASDAQ:CRSP) is the most popular stock in this table. On the other hand Owl Rock Capital Corporation (NYSE:ORCC) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks The Mosaic Company (NYSE:MOS) is more popular among hedge funds. Our overall hedge fund sentiment score for MOS is 82.6. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 23.8% in 2020 through September 14th but still managed to beat the market by 17.6 percentage points. Hedge funds were also right about betting on MOS as the stock returned 45.3% since the end of June and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
