Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
One of the stocks tracked by Insider Monkey that registered an increase in popularity among smart money investors last quarter is AGCO Corporation (NYSE:AGCO). Between July and September, the number of investors tracked by us long AGCO went up by three. AGCO was in 26 hedge funds’ portfolios at the end of September. There were 23 hedge funds in our database with AGCO holdings at the end of the previous quarter. However, 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 Gramercy Property Trust Inc (NYSE:GPT), Elbit Systems Ltd. (USA) (NASDAQ:ESLT), and NuStar Energy L.P. (NYSE:NS) to gather more data points.
Follow Agco Corp (NYSE:AGCO)
Follow Agco Corp (NYSE:AGCO)
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.
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Keeping this in mind, let’s go over the recent action regarding AGCO Corporation (NYSE:AGCO).
What does the smart money think about AGCO Corporation (NYSE:AGCO)?
A total of 26 funds tracked by Insider Monkey were long AGCO Corporation (NYSE:AGCO) at the end of the third quarter, an increase of 13% from the end of June. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Clifton S. Robbins’ Blue Harbour Group has the most valuable position in AGCO Corporation (NYSE:AGCO), worth close to $337.1 million, amounting to 12.5% of its total 13F portfolio. The second most bullish fund manager is Cliff Asness of AQR Capital Management, with a $71.6 million position. Other members of the smart money that hold long positions include Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC, Martin Whitman’s Third Avenue Management, and Brian Ashford-Russell and Tim Woolley’s Polar Capital.
With a general bullishness amongst the heavyweights, key money managers have jumped into AGCO Corporation (NYSE:AGCO) headfirst. Jim Simons’ Renaissance Technologies created the most outsized position in AGCO Corporation (NYSE:AGCO). Renaissance Technologies had $6.3 million invested in the company at the end of the quarter. David E. Shaw’s D E Shaw also initiated a $3.1 million position during the quarter. The other funds with brand new AGCO positions are Mike Vranos’ Ellington, Ken Griffin’s Citadel Investment Group, and Paul Tudor Jones’ Tudor Investment Corp.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as AGCO Corporation (NYSE:AGCO) but similarly valued. We will take a look at Gramercy Property Trust Inc (NYSE:GPT), Elbit Systems Ltd. (USA) (NASDAQ:ESLT), NuStar Energy L.P. (NYSE:NS), and Flowers Foods, Inc. (NYSE:FLO). This group of stocks’ market valuations are closest to AGCO’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GPT | 13 | 192021 | -1 |
| ESLT | 5 | 111087 | 0 |
| NS | 8 | 13485 | 1 |
| FLO | 17 | 150135 | -6 |
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $117 million, which compares to $577 million in AGCO’s case. Flowers Foods, Inc. (NYSE:FLO) is the most popular stock in this table, while Elbit Systems Ltd. (USA) (NASDAQ:ESLT) is the least popular one with only five investors holding long positions. Compared to these stocks AGCO Corporation (NYSE:AGCO) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None
