The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Seaboard Corp (NYSEMKT:SEB) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is Seaboard Corp (NYSEMKT:SEB) undervalued? The best stock pickers are actually selling. The number of long hedge fund bets that are revealed through 13F filings suffered a reduction of 2 in recent months. At the end of this article we will also compare SEB to other stocks including Validus Holdings, Ltd. (NYSE:VR), Genesee & Wyoming Inc (NYSE:GWR), and AGCO Corporation (NYSE:AGCO) to get a better sense of its popularity.
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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What does the smart money think about Seaboard Corp (NYSEMKT:SEB)?
At the end of the third quarter, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 17% decline from the previous quarter. By comparison, 8 hedge funds held shares or bullish call options in SEB heading into this year, so hedge fund sentiment is still positive for 2016 through the end of September. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Kahn Brothers holds the largest position in Seaboard Corp (NYSEMKT:SEB). Kahn Brothers has a $26.9 million position in the stock, comprising 4.9% of its 13F portfolio. The second largest stake is held by Renaissance Technologies, one of the largest hedge funds in the world, with a $17.7 million position. Remaining hedge funds and institutional investors that hold long positions contain Martin Whitman’s Third Avenue Management, Benjamin A. Smith’s Laurion Capital Management, and Cliff Asness’ AQR Capital 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.
Since Seaboard Corp (NYSEMKT:SEB) has gone through falling interest from the smart money, it’s safe to say that there lies a certain “tier” of hedge funds that elected to cut their full holdings last quarter. It’s worth mentioning that Jim Roumell’s Roumell Asset Management dumped the largest position of all the investors tracked by Insider Monkey, worth about $0.7 million in stock. Ken Griffin’s fund, Citadel Investment Group, also dropped its stock, about $0.4 million worth.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Seaboard Corp (NYSEMKT:SEB) but similarly valued. We will take a look at Validus Holdings, Ltd. (NYSE:VR), Genesee & Wyoming Inc (NYSE:GWR), AGCO Corporation (NYSE:AGCO), and Synovus Financial Corp. (NYSE:SNV). This group of stocks’ market caps are similar to SEB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VR | 17 | 220326 | -2 |
| GWR | 12 | 169440 | -4 |
| AGCO | 26 | 577012 | 3 |
| SNV | 21 | 454718 | -1 |
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $355 million. That figure was $52 million in SEB’s case. AGCO Corporation (NYSE:AGCO) is the most popular stock in this table. On the other hand Genesee & Wyoming Inc (NYSE:GWR) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Seaboard Corp (NYSEMKT:SEB) is even less popular than GWR. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
Disclosure: None
