Our analysis of the latest round of 13F filings has shown a number of stocks that saw increased interest from hedge fund managers, that more than doubled the value of hedge funds’ holdings at the end of the quarter. In this article we’ll discuss the top five stocks hedge funds have doubled down on, arranged by the total value of holdings. Most of these stocks are either subject to takeover bids or have been pursuing attractive takeover deals. One particular stock was subject of activist efforts from a renowned hedge fund.
Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see more details here).
First up is Terex Corporation (NYSE:TEX) a manufacturer of heavy lifting equipment. During the first quarter, the number of hedge funds invested in the stock rose to 38 while the value of their holding was up by 132% to $489 million compared to the previous quarter. Steve Cohen gave a massive 1115% boost to his fund’s holding of Terex Corporation (NYSE:TEX), amassing 2.03 million shares worth $50.5 million. Investors and arbitrageurs were dealt a major blow, after the proposed takeover of Terex by Zoomlion was promptly rebuffed by Chinese authorities. Zoomlion, also a manufacturer of heavy lifting machinery, offered to pay $31 for each share of Terex in their bid to hijack the company’s merger with Finnish rival Konecranes. In the mean time, Terex Corporation (NYSE:TEX) reached a deal with Konecranes for the sale of its maritime port and factory crane business for $1.3 billion. Terex shares ended yesterday’s session at $21.18 per unit, up by 16% for the year.
The value of hedge funds’ investment in Syngenta AG (ADR) (NYSE:SYT) rose to $524 million during the first three months of 2016, from $233 million registered at the end of December. The number of funds holding the stock also increased to 32 or 4.2% of the funds followed by Insider Monkey. Robert Emil Zoellner‘s fund, Alpine Associates, initiated a position in Syngenta AG (ADR) (NYSE:SYT), having acquired some 1.41 million shares worth $117 million according to its latest 13F filing. A Swiss manufacturer of agricultural chemical solutions, Syngenta is currently in merger negotiations with Chinese state-owned chemical giant ChemChina. The deal is valued $43 billion and includes $465 per share and a special dividend of five Swiss Francs (approximately $5.05). The deadline for the approval by Syngenta shareholders has recently been extended to July 18 due to delays in regulatory approvals and both companies said they expect the deal to be completed by the end of the year.
On the next page we’ll take a look at three other stocks that hedge funds piled into.