Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the second quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of AGCO Corporation (NYSE:AGCO) based on that data and determine whether they were really smart about the stock.
AGCO Corporation (NYSE:AGCO) has experienced an increase in support from the world’s most elite money managers of late. AGCO Corporation (NYSE:AGCO) was in 21 hedge funds’ portfolios at the end of June. The all time high for this statistics is 32. Our calculations also showed that AGCO 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 56 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
John Overdeck of Two Sigma Advisors
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost precious metals prices. So, we are checking out this junior gold mining stock. We are also checking out this lithium company which could benefit from the electric car adoption. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website to get excerpts of these letters in your inbox. Now let’s go over the new hedge fund action regarding AGCO Corporation (NYSE:AGCO).
How have hedgies been trading AGCO Corporation (NYSE:AGCO)?
At Q2’s end, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 11% from the first quarter of 2020. On the other hand, there were a total of 25 hedge funds with a bullish position in AGCO a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, AQR Capital Management, managed by Cliff Asness, holds the number one position in AGCO Corporation (NYSE:AGCO). AQR Capital Management has a $31.3 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $21.9 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other members of the smart money with similar optimism comprise Ian Simm’s Impax Asset Management, Clint Murray’s Lodge Hill Capital and Renaissance Technologies. In terms of the portfolio weights assigned to each position Lodge Hill Capital allocated the biggest weight to AGCO Corporation (NYSE:AGCO), around 5.68% of its 13F portfolio. Sandbar Asset Management is also relatively very bullish on the stock, designating 1.68 percent of its 13F equity portfolio to AGCO.
As one would reasonably expect, key money managers were breaking ground themselves. Sandbar Asset Management, managed by Michael Cowley, created the most valuable position in AGCO Corporation (NYSE:AGCO). Sandbar Asset Management had $5.4 million invested in the company at the end of the quarter. Lee Ainslie’s Maverick Capital also initiated a $1.3 million position during the quarter. The other funds with brand new AGCO positions are Donald Sussman’s Paloma Partners, Michael Gelband’s ExodusPoint Capital, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as AGCO Corporation (NYSE:AGCO) but similarly valued. We will take a look at Penn National Gaming, Inc (NASDAQ:PENN), Emergent Biosolutions Inc (NYSE:EBS), Littelfuse, Inc. (NASDAQ:LFUS), MorphoSys AG (NASDAQ:MOR), LogMeIn Inc (NASDAQ:LOGM), Redfin Corporation (NASDAQ:RDFN), and New Relic Inc (NYSE:NEWR). This group of stocks’ market values match AGCO’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PENN | 34 | 429102 | 16 |
| EBS | 21 | 119854 | 4 |
| LFUS | 24 | 316882 | 2 |
| MOR | 6 | 12533 | 1 |
| LOGM | 31 | 785090 | 3 |
| RDFN | 26 | 203341 | 6 |
| NEWR | 35 | 1206690 | 4 |
| Average | 25.3 | 439070 | 5.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.3 hedge funds with bullish positions and the average amount invested in these stocks was $439 million. That figure was $145 million in AGCO’s case. New Relic Inc (NYSE:NEWR) is the most popular stock in this table. On the other hand MorphoSys AG (NASDAQ:MOR) is the least popular one with only 6 bullish hedge fund positions. AGCO Corporation (NYSE:AGCO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AGCO is 52.5. 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 gained 24.8% in 2020 through the end of September and still beat the market by 19.3 percentage points. A small number of hedge funds were also right about betting on AGCO as the stock returned 34.2% in the third quarter and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
