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AGCO Corporation (AGCO): Are Hedge Funds Right About This Stock?

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If you were to ask many market players, hedge funds are assumed to be useless, outdated investment tools of a forgotten age. Although there are more than 8,000 hedge funds with their doors open today, Insider Monkey focuses on the moguls of this club, about 525 funds. It is widely held that this group oversees most of the hedge fund industry’s total capital, and by paying attention to their highest quality picks, we’ve discovered a number of investment strategies that have historically outpaced Mr. Market. Our small-cap hedge fund strategy outperformed 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 (find a sample of our picks).

Just as crucial, bullish insider trading activity is a second way to analyze the marketplace. There are lots of reasons for an upper level exec to get rid of shares of his or her company, but only one, very simple reason why they would buy. Many academic studies have demonstrated the valuable potential of this strategy if “monkeys” know what to do (learn more here).

Thus, let’s analyze the newest info for AGCO Corporation (NYSE:AGCO).

AGCO Corporation (NYSE:AGCO)

How have hedgies been trading AGCO Corporation (NYSE:AGCO)?

At Q2’s end, a total of 24 of the hedge funds we track were bullish in this stock, a change of -4% from the previous quarter. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their stakes meaningfully.

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As AGCO Corporation (NYSE:AGCO) has faced declining interest from upper-tier hedge fund managers, it’s safe to say that there was a specific group of hedge funds that slashed their full holdings heading into Q2. It’s worth mentioning that Jeffrey Vinik’s Vinik Asset Management sold off the biggest investment of all the hedgies we key on, comprising close to $40 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also said goodbye to its stock, about $29.3 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds heading into Q2.

How are insiders trading AGCO Corporation (NYSE:AGCO)?

Legal insider trading, particularly when it’s bullish, is particularly usable when the primary stock in question has seen transactions within the past six months. Over the latest 180-day time frame, AGCO Corporation (NYSE:AGCO) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to AGCO Corporation (NYSE:AGCO). These stocks are Lindsay Corporation (NYSE:LNN), CNH Global NV (ADR) (NYSE:CNH), Manitowoc Company, Inc. (NYSE:MTW), Terex Corporation (NYSE:TEX), and Joy Global Inc. (NYSE:JOY). All of these stocks are in the farm & construction machinery industry and their market caps resemble AGCO’s market cap.

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