Investing in small-cap stocks has historically been a way to outperform the market, as small-cap companies typically grow faster on average than the blue chips. That outperformance comes with a price, however, as there are occasional periods of higher volatility and underperformance. The time period between the end of June 2015 and the end of June 2016 was one of those periods, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by more than 10 percentage points. Given that the funds we track tend to have a disproportionate amount of their portfolios in smaller-cap stocks, they have been underperforming the large-cap indices. However, things have dramatically changed over the last 5 months. Small-cap stocks reversed their misfortune and beat the large-cap indices by almost 11 percentage points since the end of June. In this article, we use our extensive database of hedge fund holdings to find out what the smart money thinks of Syngenta AG (ADR) (NYSE:SYT).
Is Syngenta AG (ADR) (NYSE:SYT) going to take off soon? Money managers are taking an optimistic view. The number of long hedge fund positions went up by 3 recently. SYT was in 36 hedge funds’ portfolios at the end of September. There were 33 hedge funds in our database with SYT positions at the end of the previous quarter. At the end of this article we will also compare SYT to other stocks including Marsh & McLennan Companies, Inc. (NYSE:MMC), Yahoo! Inc. (NASDAQ:YHOO), and T MOBILE US INC (NYSE:TMUS) to get a better sense of its popularity.
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What have hedge funds been doing with Syngenta AG (ADR) (NYSE:SYT)?
Heading into the fourth quarter of 2016, a total of 36 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 9% rise from the second quarter of 2016 and the fourth-straight quarterly rise in hedge fund ownership. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Arrowgrass Capital Partners, managed by Nick Niell, holds the largest position in Syngenta AG (ADR) (NYSE:SYT). Arrowgrass Capital Partners has a $252.8 million position in the stock, comprising 3.4% of its 13F portfolio. On Arrowgrass Capital Partners’s heels is Matthew Mark of Jet Capital Investors, with a $158.6 million position; 11.2% of its 13F portfolio is allocated to the company. Other members of the smart money that hold long positions contain Robert Emil Zoellner’s Alpine Associates, Clint Carlson’s Carlson Capital, and Jonathon Jacobson’s Highfields Capital Management.
With general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Highfields Capital Management initiated the biggest position in Syngenta AG (ADR) (NYSE:SYT), having $59.8 million invested in the company at the end of the quarter. Curtis Schenker and Craig Effron’s Scoggin also made a $29.4 million investment in the stock during the quarter. The other funds with brand new SYT positions are Jamie Zimmerman’s Litespeed Management, Richard Driehaus’ Driehaus Capital, and Carl Tiedemann and Michael Tiedemann’s TIG Advisors.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Syngenta AG (ADR) (NYSE:SYT) but similarly valued. We will take a look at Marsh & McLennan Companies, Inc. (NYSE:MMC), Yahoo! Inc. (NASDAQ:YHOO), T MOBILE US INC (NYSE:TMUS), and Mizuho Financial Group Inc. (ADR) (NYSE:MFG). This group of stocks’ market valuations resemble SYT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MMC | 31 | 540778 | 7 |
| YHOO | 90 | 8274108 | 9 |
| TMUS | 58 | 3343677 | 6 |
| MFG | 5 | 11054 | 0 |
As you can see these stocks had an average of 46 hedge funds with bullish positions and the average amount invested in these stocks was $3.04 billion. That figure was $1.22 billion in SYT’s case. Yahoo! Inc. (NASDAQ:YHOO) is the most popular stock in this table. On the other hand Mizuho Financial Group Inc. (ADR) (NYSE:MFG) is the least popular one with only 5 bullish hedge fund positions. Syngenta AG (ADR) (NYSE:SYT) 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 YHOO might be a better candidate to consider a long position.
Disclosure: None
