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Hedge Funds Are Selling Potash Corp./Saskatchewan (USA) (POT)

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Potash Corp./Saskatchewan (USA) (NYSE:POT) was in 23 hedge funds’ portfolio at the end of the first quarter of 2013. POT has experienced a decrease in support from the world’s most elite money managers of late. There were 27 hedge funds in our database with POT holdings at the end of the previous quarter.

According to most market participants, hedge funds are viewed as worthless, old investment vehicles of yesteryear. While there are over 8000 funds with their doors open at present, we at Insider Monkey choose to focus on the upper echelon of this club, close to 450 funds. Most estimates calculate that this group has its hands on most of the smart money’s total asset base, and by paying attention to their top stock picks, we have formulated a number of investment strategies that have historically outpaced Mr. Market. 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 started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Potash Corp./Saskatchewan (USA) (NYSE:POT)Equally as beneficial, bullish insider trading activity is another way to parse down the financial markets. Obviously, there are a variety of reasons for a bullish insider to sell shares of his or her company, but only one, very obvious reason why they would buy. Several academic studies have demonstrated the valuable potential of this tactic if piggybackers know where to look (learn more here).

Now, let’s take a gander at the key action surrounding Potash Corp./Saskatchewan (USA) (NYSE:POT).

What have hedge funds been doing with Potash Corp./Saskatchewan (USA) (NYSE:POT)?

Heading into Q2, a total of 23 of the hedge funds we track were long in this stock, a change of -15% from the first quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their stakes considerably.

When looking at the hedgies we track, Jean-Marie Eveillard’s First Eagle Investment Management had the biggest position in Potash Corp./Saskatchewan (USA) (NYSE:POT), worth close to $469.2 million, comprising 1.6% of its total 13F portfolio. On First Eagle Investment Management’s heels is Adage Capital Management, managed by Phill Gross and Robert Atchinson, which held a $396.5 million position; the fund has 1.3% of its 13F portfolio invested in the stock. Remaining peers that are bullish include Daniel Bubis’s Tetrem Capital Management, Richard Chilton’s Chilton Investment Company and Ken Griffin’s Citadel Investment Group.

Seeing as Potash Corp./Saskatchewan (USA) (NYSE:POT) has witnessed bearish sentiment from hedge fund managers, it’s safe to say that there was a specific group of money managers that decided to sell off their positions entirely in Q1. Intriguingly, Philippe Jabre’s Jabre Capital Partners sold off the biggest investment of the “upper crust” of funds we track, valued at about $73.2 million in call options. Jim Simons’s fund, Renaissance Technologies, also dropped its stock, about $58.4 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 4 funds in Q1.

How have insiders been trading Potash Corp./Saskatchewan (USA) (NYSE:POT)?

Insider buying is most useful when the company in question has seen transactions within the past six months. Over the last six-month time frame, Potash Corp./Saskatchewan (USA) (NYSE:POT) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Potash Corp./Saskatchewan (USA) (NYSE:POT). These stocks are CF Industries Holdings, Inc. (NYSE:CF), Agrium Inc. (USA) (NYSE:AGU), Monsanto Company (NYSE:MON), Mosaic Co (NYSE:MOS), and Syngenta AG (ADR) (NYSE:SYT). This group of stocks are in the agricultural chemicals industry and their market caps are similar to POT’s market cap.

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