Is Bunge Ltd (NYSE:BG) a buy, sell, or hold? Investors who are in the know are becoming less confident. The number of bullish hedge fund positions stayed the same which is a slightly negative development in our experience
In the eyes of most shareholders, hedge funds are perceived as underperforming, outdated investment tools of the past. While there are over 8000 funds with their doors open at present, we choose to focus on the upper echelon of this group, around 450 funds. Most estimates calculate that this group has its hands on the lion’s share of the smart money’s total asset base, and by paying attention to their best stock picks, we have deciphered a number of investment strategies that have historically outpaced the S&P 500 index. 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Equally as key, positive insider trading sentiment is a second way to break down the stock market universe. There are a variety of motivations for an insider to cut shares of his or her company, but only one, very simple reason why they would buy. Various empirical studies have demonstrated the useful potential of this method if piggybackers understand where to look (learn more here).
With these “truths” under our belt, it’s important to take a gander at the key action surrounding Bunge Ltd (NYSE:BG).
Hedge fund activity in Bunge Ltd (NYSE:BG)
At Q1’s end, a total of 19 of the hedge funds we track were bullish in this stock, a change of 0% from the previous quarter. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their stakes substantially.
Of the funds we track, Carlson Capital, managed by Clint Carlson, holds the biggest position in Bunge Ltd (NYSE:BG). Carlson Capital has a $131.3 million position in the stock, comprising 1.8% of its 13F portfolio. The second largest stake is held by Adage Capital Management, managed by Phill Gross and Robert Atchinson, which held a $95.4 million position; 0.3% of its 13F portfolio is allocated to the company. Remaining peers that hold long positions include Cliff Asness’s AQR Capital Management, Israel Englander’s Millennium Management and D. E. Shaw’s D E Shaw.
Because Bunge Ltd (NYSE:BG) has experienced declining sentiment from hedge fund managers, we can see that there is a sect of fund managers who were dropping their entire stakes at the end of the first quarter. At the top of the heap, Robert Bishop’s Impala Asset Management said goodbye to the largest investment of all the hedgies we track, worth close to $57.5 million in stock., and Jacob Doft of Highline Capital Management was right behind this move, as the fund sold off about $17.6 million worth. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
How are insiders trading Bunge Ltd (NYSE:BG)?
Insider buying is best served when the primary stock in question has experienced transactions within the past half-year. Over the latest half-year time period, Bunge Ltd (NYSE:BG) has seen zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Bunge Ltd (NYSE:BG). These stocks are Cresud S.A.C.I.F. y A. (ADR) (NASDAQ:CRESY), Adecoagro SA (NYSE:AGRO), The Andersons, Inc. (NASDAQ:ANDE), Fresh Del Monte Produce Inc (NYSE:FDP), and Archer Daniels Midland Company (NYSE:ADM). This group of stocks are in the farm products industry and their market caps are closest to BG’s market cap.