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Hedge Funds Are Betting On CF Industries Holdings, Inc. (CF)

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CF Industries Holdings, Inc. (NYSE:CF) has a ton of supporters. How about in the hedge fund industry?

If you were to ask many of your fellow readers, hedge funds are viewed as useless, outdated investment tools of a forgotten age. Although there are more than 8,000 hedge funds with their doors open currently, this site looks at the upper echelon of this club, around 525 funds. It is widely held that this group has its hands on the lion’s share of the hedge fund industry’s total assets, and by keeping an eye on their best picks, we’ve unearthed a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year 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 topped the S&P 500 index by 33 percentage points in 11 months (find the details here).

Just as useful, bullish insider trading sentiment is another way to analyze the world of equities. As the old adage goes: there are plenty of motivations for an executive to downsize shares of his or her company, but only one, very clear reason why they would buy. Various empirical studies have demonstrated the useful potential of this method if piggybackers understand what to do (learn more here).

CF Industries Holdings, Inc.

What’s more, let’s examine the latest info about CF Industries Holdings, Inc. (NYSE:CF).

Hedge fund activity in CF Industries Holdings, Inc. (NYSE:CF)

Heading into Q3, a total of 46 of the hedge funds we track were long in this stock, a change of 12% from the first quarter. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were increasing their stakes considerably.

When using filings from the hedgies we track, Renaissance Technologies, managed by Jim Simons, holds the biggest position in CF Industries Holdings, Inc. (NYSE:CF). Renaissance Technologies has a $190.5 million position in the stock, comprising 0.5% of its 13F portfolio. The second largest stake is held by ValueAct Capital, managed by Jeffrey Ubben, which held a $171.5 million position; 1.8% of its 13F portfolio is allocated to the stock. Other hedgies with similar optimism include Phill Gross and Robert Atchinson’s Adage Capital Management, Dan Loeb’s Third Point and D. E. Shaw’s D E Shaw.

As aggregate interest spiked, specific money managers have jumped into CF Industries Holdings, Inc. (NYSE:CF) headfirst. Renaissance Technologies, managed by Jim Simons, initiated the most valuable position in CF Industries Holdings, Inc. (NYSE:CF). Renaissance Technologies had 190.5 million invested in the company at the end of the quarter. Jeffrey Ubben’s ValueAct Capital also made a $171.5 million investment in the stock during the quarter. The other funds with brand new CF positions are Phill Gross and Robert Atchinson’s Adage Capital Management, Dan Loeb’s Third Point, and D. E. Shaw’s D E Shaw.

How are insiders trading CF Industries Holdings, Inc. (NYSE:CF)?

Legal insider trading, particularly when it’s bullish, is at its handiest when the company in focus has experienced transactions within the past six months. Over the last 180-day time period, CF Industries Holdings, Inc. (NYSE:CF) has seen zero unique insiders buying, and 3 insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to CF Industries Holdings, Inc. (NYSE:CF). These stocks are Syngenta AG (ADR) (NYSE:SYT), Terra Nitrogen Company, L.P. (NYSE:TNH), Potash Corp./Saskatchewan (USA) (NYSE:POT), Mosaic Co (NYSE:MOS), and Agrium Inc. (USA) (NYSE:AGU). This group of stocks are in the agricultural chemicals industry and their market caps are closest to CF’s market cap.

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