Is Monsanto Company (NYSE:MON) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy league graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments (for some reason media paid a ton of attention to Ackman’s gigantic JC Penney and Valeant failures) and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Is Monsanto Company (NYSE:MON) worth your attention right now? Hedge funds are taking a pessimistic view. The number of bullish hedge fund positions dropped by 10 lately. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Stryker Corporation (NYSE:SYK), Public Storage (NYSE:PSA), and Caterpillar Inc. (NYSE:CAT) to gather more data points.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
What have hedge funds been doing with Monsanto Company (NYSE:MON)?
Heading into the fourth quarter of 2016, a total of 77 of the hedge funds tracked by Insider Monkey were bullish on this stock, an 11% drop from the second quarter of 2016. That came after a quarter where more funds jumped into the stock than any other, as takeover rumors swirled around the company. With the smart money’s sentiment also swirling, there exists a select group of key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Third Point, managed by Dan Loeb, holds the most valuable position in Monsanto Company (NYSE:MON). Third Point has a $378.1 million position in the stock, comprising 3.3% of its 13F portfolio. Coming in second is Highfields Capital Management, led by Jonathon Jacobson, holding a $362.7 million position. Remaining peers with similar optimism consist of James Dinan’s York Capital Management, Israel Englander’s Millennium Management, and Clint Carlson’s Carlson Capital.