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

AGCO Corporation (NYSE:AGCO) was in 16 hedge funds’ portfolio at the end of the fourth quarter of 2012. AGCO shareholders have witnessed a decrease in support from the world’s most elite money managers recently. There were 18 hedge funds in our database with AGCO positions at the end of the previous quarter.

At the moment, there are tons of methods shareholders can use to watch stocks. A pair of the most useful are hedge fund and insider trading activity. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the top investment managers can outperform the S&P 500 by a healthy amount (see just how much).

Just as important, optimistic insider trading activity is another way to break down the stock market universe. Obviously, there are a variety of incentives for an upper level exec to cut shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Plenty of empirical studies have demonstrated the useful potential of this tactic if you understand what to do (learn more here).

Keeping this in mind, it’s important to take a gander at the recent action surrounding AGCO Corporation (NYSE:AGCO).

What does the smart money think about AGCO Corporation (NYSE:AGCO)?

Heading into 2013, a total of 16 of the hedge funds we track were bullish in this stock, a change of -11% from one quarter earlier. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their stakes considerably.

Of the funds we track, Jeffrey Vinik’s Vinik Asset Management had the biggest position in AGCO Corporation (NYSE:AGCO), worth close to $31 million, accounting for 0.9% of its total 13F portfolio. The second largest stake is held by Clint Carlson of Carlson Capital, with a $24 million position; 0% of its 13F portfolio is allocated to the company. Remaining hedge funds with similar optimism include D. E. Shaw’s D E Shaw, Crispin Odey’s Odey Asset Management Group and Ken Griffin’s Citadel Investment Group.

Since AGCO Corporation (NYSE:AGCO) has experienced declining sentiment from the entirety of the hedge funds we track, it’s safe to say that there is a sect of hedge funds who sold off their positions entirely in Q4. Interestingly, Richard Schimel’s Diamondback Capital dumped the biggest position of the “upper crust” of funds we track, totaling close to $2 million in stock.. Ken Fisher’s fund, Fisher Asset Management, also dumped its stock, about $2 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 2 funds in Q4.

What have insiders been doing with AGCO Corporation (NYSE:AGCO)?

Insider buying is most useful when the primary stock in question has seen transactions within the past six months. Over the latest six-month time period, AGCO Corporation (NYSE:AGCO) has seen 1 unique insiders buying, and 4 insider sales (see the details of insider trades here).

With the results exhibited by the aforementioned strategies, retail investors must always monitor hedge fund and insider trading sentiment, and AGCO Corporation (NYSE:AGCO) applies perfectly to this mantra.

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