Concerns over a shift in Fed’s easy monetary policy have hit several hedge funds hard during the third quarter. A number of sectors are in correction territory. More importantly, Russell 2000 ETF (IWM) underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points between June 25, 2015 and October 30, 2015. Hedge funds and institutional investors tracked by Insider Monkey usually invest a disproportionate amount of their portfolios in smaller cap stocks. We have been receiving indications that hedge funds were paring back their overall exposure and this is one of the factors behind the recent movements in major indices. In this article, we will take a closer look at hedge fund sentiment towards Potash Corp of Saskatchewan (USA) (NYSE:POT).
Potash Corp of Saskatchewan (USA) (NYSE:POT) investors should be aware of an increase in enthusiasm from smart money lately. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Vornado Realty Trust (NYSE:VNO), Intuitive Surgical, Inc. (NASDAQ:ISRG), and Macy’s, Inc. (NYSE:M) to gather more data points.
Follow Potash Corp Saskatchewan Inc (NYSE:POT)
Follow Potash Corp Saskatchewan Inc (NYSE:POT)
To the average investor there are a multitude of methods stock traders employ to value their stock investments. A pair of the most useful methods are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the top picks of the top money managers can outpace the S&P 500 by a healthy margin (see the details here).
Keeping this in mind, let’s analyze the key action encompassing Potash Corp./Saskatchewan (USA) (NYSE:POT).
What does the smart money think about Potash Corp of Saskatchewan (USA) (NYSE:POT)?
At Q3’s end, a total of 31 of the hedge funds tracked by Insider Monkey were long this stock, a change of 3% from the second quarter. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, managed by Jim Simons, holds the biggest position in Potash Corp of Saskatchewan (USA) (NYSE:POT). Renaissance Technologies has a $105.4 million position in the stock, comprising 0.3% of its 13F portfolio. On Renaissance Technologies’s heels is PDT Partners, managed by Peter Muller, which holds a $22.3 million position; 0.5% of its 13F portfolio is allocated to the stock. Other peers with similar optimism contain John Overdeck and David Siegel’s Two Sigma Advisors, D E Shaw and Thomas Ellis and Todd Hammer’s North Run Capital.
As aggregate interest increased, key hedge funds have been driving this bullishness. PDT Partners, managed by Peter Muller, assembled the largest position in Potash Corp of Saskatchewan (USA) (NYSE:POT). PDT Partners had $22.3 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also initiated a $21.9 million position during the quarter. The other funds with new positions in the stock are Thomas Ellis and Todd Hammer’s North Run Capital, Benjamin A. Smith’s Laurion Capital Management, and Matthew Tewksbury’s Stevens Capital Management.
Let’s check out hedge fund activity in other stocks similar to Potash Corp of Saskatchewan (USA) (NYSE:POT). We will take a look at Vornado Realty Trust (NYSE:VNO), Intuitive Surgical, Inc. (NASDAQ:ISRG), Macy’s, Inc. (NYSE:M), and BioMarin Pharmaceutical Inc. (NASDAQ:BMRN). This group of stocks’ market valuations match POT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VNO | 23 | 528621 | 3 |
| ISRG | 34 | 961959 | 2 |
| M | 67 | 1592888 | 6 |
| BMRN | 50 | 1742311 | 1 |
As you can see these stocks had an average of 43.5 hedge funds with bullish positions and the average amount invested in these stocks was $1206 million. That figure was $823 million in POT’s case. Macy’s, Inc. (NYSE:M) is the most popular stock in this table. On the other hand Vornado Realty Trust (NYSE:VNO) is the least popular one with only 23 bullish hedge fund positions. Potash Corp of Saskatchewan (USA) (NYSE:POT) 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 M might be a better candidate to consider a long position.
