Mosaic Co (MOS): Are Hedge Funds Right About This Stock?

Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Micron and Anadarko Petroleum, have not done well during the last 12 months ending in October due to various reasons. Nevertheless, the data show elite investors’ consensus picks have done well on average. The top 30 S&P 500 stocks among hedge funds at the end of September 2014 yielded an average return of 9.5% during the last four quarters ending in October, and sixty-three percent of these 30 stocks outperformed the market. S&P 500 Index returned only 5.2% during the same period and less than 49% of its constituents managed to beat this return. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at Mosaic Co (NYSE:MOS) from the perspective of those elite funds.

Mosaic Co (NYSE:MOS) has experienced a decrease in support from the world’s most elite money managers recently. MOS was in 39 hedge funds’ portfolios at the end of September. There were 47 hedge funds in our database with MOS 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 Church & Dwight Co., Inc. (NYSE:CHD), XL Group plc (NYSE:XL), and Xilinx, Inc. (NASDAQ:XLNX) to gather more data points.

At the moment, there are plenty of metrics stock market investors use to appraise stocks. A duo of the best metrics is composed of hedge fund and insider trading interest. Our researchers have shown that, historically, those who follow the best picks of the elite money managers can outperform the broader indices by a very impressive margin (see the details here).

Now, let’s review the latest action encompassing Mosaic Co (NYSE:MOS).

How have hedgies been trading Mosaic Co (NYSE:MOS)?

At Q3’s end, a total of 39 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -17% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Adage Capital Management, managed by Phill Gross and Robert Atchinson, holds the largest position in Mosaic Co (NYSE:MOS). Adage Capital Management has a $151.5 million position in the stock, comprising 0.4% of its 13F portfolio. Sitting at the No. 2 spot is AQR Capital Management, led by Cliff Asness, holding a $94.7 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that are bullish consist of Glenn Russell Dubin’s Highbridge Capital Management, D. E. Shaw’s D E Shaw and David Harding’s Winton Capital Management.

Due to the fact that Mosaic Co (NYSE:MOS) has faced declining sentiment from the entirety of the hedge funds we track, we can see that there were a few hedgies who were dropping their full holdings by the end of the third quarter. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management dropped the biggest position of the 700 funds monitored by Insider Monkey, comprising an estimated $59.1 million in stock. Robert Polak’s fund, Anchor Bolt Capital, also dumped its stock, about $58.4 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 8 funds by the end of the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Mosaic Co (NYSE:MOS). These stocks are Church & Dwight Co., Inc. (NYSE:CHD), XL Group plc (NYSE:XL), Xilinx, Inc. (NASDAQ:XLNX), and KeyCorp (NYSE:KEY). This group of stocks’ market caps are closest to MOS’s market cap.

As you can see these stocks had an average of 28 hedge funds with bullish positions and the average amount invested in these stocks was $766 million. That figure was $506 million in MOS’s case. XL Group plc (NYSE:XL) is the most popular stock in this table. On the other hand Church & Dwight Co., Inc. (NYSE:CHD) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Mosaic Co (NYSE:MOS), with 39 bullish hedge fund positions, is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.