Now, according to many market players, hedge funds are seen as delayed, old investment vehicles of a forgotten age. Although there are over 8,000 hedge funds trading currently, Insider Monkey looks at the moguls of this group, around 525 funds. Analysts calculate that this group controls the lion's share of all hedge funds' total assets, and by monitoring their highest quality equity investments, we've figured out a few investment strategies that have historically outpaced the S&P 500. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we've began to sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).
Just as crucial, positive insider trading sentiment is another way to look at the investments you're interested in. As the old adage goes: there are lots of stimuli for a bullish insider to drop shares of his or her company, but just one, very obvious reason why they would behave bullishly. Plenty of academic studies have demonstrated the impressive potential of this tactic if "monkeys" know what to do (learn more here).
What's more, it's important to examine the latest info for Monsanto Company (NYSE:MON).
In preparation for the third quarter, a total of 59 of the hedge funds we track held long positions in this stock, a change of -6% from one quarter earlier. With hedge funds' sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes substantially.Out of the hedge funds we follow, Stephen Mandel's Lone Pine Capital had the most valuable position in Monsanto Company (NYSE:MON), worth close to $613.3 million, accounting for 3% of its total 13F portfolio. On Lone Pine Capital's heels is Andreas Halvorsen of Viking Global, with a $414.5 million position; 2.3% of its 13F portfolio is allocated to the company. Other peers with similar optimism include Phill Gross and Robert Atchinson's Adage Capital Management, John Griffin's Blue Ridge Capital and Jason Capello's Merchants' Gate Capital.
Since Monsanto Company (NYSE:MON) has experienced declining interest from the entirety of the hedge funds we track, logic holds that there exists a select few hedgies that decided to sell off their positions entirely at the end of the second quarter. At the top of the heap, Jeffrey Vinik's Vinik Asset Management said goodbye to the largest stake of the 450+ funds we monitor, totaling close to $100.8 million in stock. Sean Cullinan's fund, Point State Capital, also dropped its stock, about $54.7 million worth. These transactions are interesting, as total hedge fund interest was cut by 4 funds at the end of the second quarter.
Legal insider trading, particularly when it's bullish, is particularly usable when the company in focus has seen transactions within the past half-year. Over the last half-year time period, Monsanto Company (NYSE:MON) has seen zero unique insiders purchasing, and 10 insider sales (see the details of insider trades here).
We'll check out the relationship between both of these indicators in other stocks similar to Monsanto Company (NYSE:MON). These stocks are CF Industries Holdings, Inc. (NYSE:CF), Agrium Inc. (USA) (NYSE:AGU), Mosaic Co (NYSE:MOS), Potash Corp./Saskatchewan (USA) (NYSE:POT), and Syngenta AG (ADR) (NYSE:SYT). This group of stocks are in the agricultural chemicals industry and their market caps are similar to MON's market cap.
# of Hedge Funds
# of Insiders Buying
# of Insiders Selling
CF Industries Holdings, Inc. (NYSE:CF)
Agrium Inc. (USA) (NYSE:AGU)
Mosaic Co (NYSE:MOS)
Potash Corp./Saskatchewan (USA) (NYSE:POT)
Syngenta AG (ADR) (NYSE:SYT)
Using the results demonstrated by Insider Monkey's tactics, average investors should always watch hedge fund and insider trading sentiment, and Monsanto Company (NYSE:MON) is no exception.