Before we spend many hours researching a company, we’d like to analyze what hedge funds and billionaire investors think of the stock first. We would like to do so because the successful investors’ consensus returns have been exceptional. The top 30 mid-cap stocks among the best performing hedge funds in our database yielded an average return of 18% during the last 12 months, outperforming the S&P 500 Index funds by double digits. Although the successful funds occasionally have their duds, such as SunEdison and Valeant, the hedge fund picks seem to work on average. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Potash Corporation of Saskatchewan (USA) (NYSE:POT) .
Potash Corporation of Saskatchewan (USA) (NYSE:POT) was in 18 hedge funds’ portfolios at the end of September. POT has experienced a decrease in hedge fund interest in recent months. There were 32 hedge funds in our database with POT holdings at the end of the previous quarter. 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 SBA Communications Corporation (NASDAQ:SBAC), McCormick & Company, Incorporated (NYSE:MKC), and Spectra Energy Partners, LP (NYSE:SEP) to gather more data points.
Follow Potash Corp Saskatchewan Inc (NYSE:POT)
Follow Potash Corp Saskatchewan Inc (NYSE:POT)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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How are hedge funds trading Potash Corporation of Saskatchewan (USA) (NYSE:POT)?
At the end of the third quarter, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a fall of 44% from the previous quarter. By comparison, 26 hedge funds held shares or bullish call options in POT heading into this year. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital holds the most valuable position in Potash Corporation of Saskatchewan (USA) (NYSE:POT) which has a $79.2 million position in the stock. The second largest stake is held by Anand Parekh’s Alyeska Investment Group which holds a $30.2 million position. Some other professional money managers that are bullish include Phill Gross and Robert Atchinson’s Adage Capital Management, D. E. Shaw’s D E Shaw and Steve Cohen’s Point72 Asset Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Judging by the fact that Potash Corporation of Saskatchewan (USA) (NYSE:POT) has witnessed bearish sentiment from hedge fund managers, it’s safe to say that there exists a select few hedge funds that decided to sell off their entire stakes by the end of the third quarter. It’s worth mentioning that Jean-Marie Eveillard’s First Eagle Investment Management dumped the biggest stake of all the hedgies monitored by Insider Monkey, valued at close to $473.5 million in stock, and Rob Citrone’s Discovery Capital Management was right behind this move, as the fund said goodbye to about $50.4 million worth of shares.
Let’s go over hedge fund activity in other stocks similar to Potash Corp./Saskatchewan (USA) (NYSE:POT). These stocks are SBA Communications Corporation (NASDAQ:SBAC), McCormick & Company, Incorporated (NYSE:MKC), Spectra Energy Partners, LP (NYSE:SEP), and Franco-Nevada Corporation (NYSE:FNV). This group of stocks’ market values are similar to POT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SBAC | 43 | 2363716 | 3 |
| MKC | 21 | 127420 | 3 |
| SEP | 9 | 56399 | -4 |
| FNV | 15 | 418087 | 0 |
As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $741 million. That figure was $238 million in POT’s case. SBA Communications Corporation (NASDAQ:SBAC) is the most popular stock in this table. On the other hand Spectra Energy Partners, LP (NYSE:SEP) is the least popular one with only 9 bullish hedge fund positions. Potash Corporation 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 SBAC might be a better candidate to consider taking a long position in.
Disclosure: None
