Archer Daniels Midland Company (NYSE:ADM) was in 18 hedge funds’ portfolio at the end of the fourth quarter of 2012. ADM investors should pay attention to a decrease in hedge fund sentiment lately. There were 22 hedge funds in our database with ADM holdings at the end of the previous quarter.
To most investors, hedge funds are seen as unimportant, old investment tools of years past. While there are more than 8000 funds with their doors open today, we at Insider Monkey look at the elite of this club, about 450 funds. It is estimated that this group controls the majority of the smart money’s total capital, and by tracking their top stock picks, we have deciphered a number of investment strategies that have historically outstripped the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).
Equally as important, optimistic insider trading sentiment is another way to parse down the marketplace. There are a number of incentives for an upper level exec to downsize shares of his or her company, but only one, very obvious reason why they would behave bullishly. Many empirical studies have demonstrated the useful potential of this strategy if “monkeys” understand where to look (learn more here).
Consequently, we’re going to take a glance at the latest action regarding Archer Daniels Midland Company (NYSE:ADM).
Hedge fund activity in Archer Daniels Midland Company (NYSE:ADM)
In preparation for this year, a total of 18 of the hedge funds we track were long in this stock, a change of -18% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were upping their stakes considerably.
Of the funds we track, Warren Buffett’s Berkshire Hathaway had the most valuable position in Archer Daniels Midland Company (NYSE:ADM), worth close to $163 million, comprising 0.2% of its total 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, managed by Ken Griffin, which held a $136 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions include Phill Gross and Robert Atchinson’s Adage Capital Management, Cliff Asness’s AQR Capital Management and Tom Gayner’s Markel Gayner Asset Management.
Due to the fact that Archer Daniels Midland Company (NYSE:ADM) has faced a declination in interest from the entirety of the hedge funds we track, logic holds that there was a specific group of hedge funds that slashed their entire stakes at the end of the year. At the top of the heap, Peter J. Eichler Jr.’s Aletheia Research and Management dropped the biggest position of the 450+ funds we watch, totaling an estimated $15 million in stock.. Steven Cohen’s fund, SAC Capital Advisors, also said goodbye to its call options., about $2 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 4 funds at the end of the year.
How are insiders trading Archer Daniels Midland Company (NYSE:ADM)?
Insider trading activity, especially when it’s bullish, is most useful when the company in question has experienced transactions within the past six months. Over the latest six-month time period, Archer Daniels Midland Company (NYSE:ADM) has experienced 2 unique insiders buying, and 2 insider sales (see the details of insider trades here).
With the results exhibited by our tactics, retail investors should always watch hedge fund and insider trading activity, and Archer Daniels Midland Company (NYSE:ADM) is no exception.
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