The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Nutrien Ltd. (NYSE:NTR) based on those filings.
Nutrien Ltd. (NYSE:NTR) was in 22 hedge funds’ portfolios at the end of the first quarter of 2020. NTR has seen a decrease in hedge fund interest in recent months. There were 28 hedge funds in our database with NTR positions at the end of the previous quarter. Our calculations also showed that NTR isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.
According to most traders, hedge funds are perceived as slow, old financial tools of yesteryear. While there are over 8000 funds with their doors open today, We choose to focus on the aristocrats of this group, around 850 funds. Most estimates calculate that this group of people handle most of all hedge funds’ total capital, and by tracking their finest investments, Insider Monkey has unearthed several investment strategies that have historically outstripped the market. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Dmitry Balyasny of Balyasny Asset Management
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to take a look at the new hedge fund action regarding Nutrien Ltd. (NYSE:NTR).
Hedge fund activity in Nutrien Ltd. (NYSE:NTR)
Heading into the second quarter of 2020, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of -21% from one quarter earlier. By comparison, 25 hedge funds held shares or bullish call options in NTR a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
Among these funds, Adage Capital Management held the most valuable stake in Nutrien Ltd. (NYSE:NTR), which was worth $52.6 million at the end of the third quarter. On the second spot was Heathbridge Capital Management which amassed $28 million worth of shares. Galibier Capital Management, Marshall Wace LLP, and Renaissance Technologies 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 Moerus Capital Management allocated the biggest weight to Nutrien Ltd. (NYSE:NTR), around 12.69% of its 13F portfolio. Galibier Capital Management is also relatively very bullish on the stock, dishing out 12 percent of its 13F equity portfolio to NTR.
Judging by the fact that Nutrien Ltd. (NYSE:NTR) has witnessed a decline in interest from the aggregate hedge fund industry, it’s safe to say that there exists a select few hedgies that decided to sell off their entire stakes last quarter. Interestingly, John Horseman’s Horseman Capital Management cut the largest stake of all the hedgies tracked by Insider Monkey, valued at close to $7.6 million in stock. Noam Gottesman’s fund, GLG Partners, also said goodbye to its stock, about $6.1 million worth. These moves are interesting, as aggregate hedge fund interest fell by 6 funds last quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Nutrien Ltd. (NYSE:NTR) but similarly valued. We will take a look at Xilinx, Inc. (NASDAQ:XLNX), Synopsys, Inc. (NASDAQ:SNPS), Twitter Inc (NYSE:TWTR), and Ford Motor Company (NYSE:F). This group of stocks’ market caps resemble NTR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| XLNX | 38 | 635591 | -4 |
| SNPS | 31 | 725655 | -14 |
| TWTR | 55 | 990334 | 0 |
| F | 33 | 667079 | -3 |
| Average | 39.25 | 754665 | -5.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 39.25 hedge funds with bullish positions and the average amount invested in these stocks was $755 million. That figure was $270 million in NTR’s case. Twitter Inc (NYSE:TWTR) is the most popular stock in this table. On the other hand Synopsys, Inc. (NASDAQ:SNPS) is the least popular one with only 31 bullish hedge fund positions. Compared to these stocks Nutrien Ltd. (NYSE:NTR) is even less popular than SNPS. Hedge funds dodged a bullet by taking a bearish stance towards NTR. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but managed to beat the market by 14.2 percentage points. Unfortunately NTR wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); NTR investors were disappointed as the stock returned 11.2% during the second quarter (through June 10th) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
