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Is Agrium Inc. (USA) (NYSE:AGU) Going to Burn These Hedge Funds?

Agrium Inc. (USA) (NYSE:AGU) investors should pay attention to a decrease in hedge fund interest of late.

In today’s marketplace, there are tons of metrics shareholders can use to track Mr. Market. Some of the best are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the top investment managers can outpace the broader indices by a very impressive amount (see just how much).

Equally as important, optimistic insider trading activity is a second way to parse down the financial markets. As the old adage goes: there are a number of incentives for an executive to get rid of shares of his or her company, but only one, very obvious reason why they would buy. Several academic studies have demonstrated the market-beating potential of this tactic if investors know where to look (learn more here).

With all of this in mind, it’s important to take a glance at the key action surrounding Agrium Inc. (USA) (NYSE:AGU).

Hedge fund activity in Agrium Inc. (USA) (NYSE:AGU)

At the end of the fourth quarter, a total of 22 of the hedge funds we track were long in this stock, a change of -19% from the third quarter. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were upping their stakes substantially.

Of the funds we track, Barry Rosenstein’s JANA Partners had the largest position in Agrium Inc. (USA) (NYSE:AGU), worth close to $944 million, comprising 26.7% of its total 13F portfolio. The second largest stake is held by Third Point, managed by Dan Loeb, which held a $100 million position; 1.8% of its 13F portfolio is allocated to the stock. Other peers that are bullish include Curtis Schenker and Craig Effron’s Scoggin, Richard Chilton’s Chilton Investment Company and Daniel Bubis’s Tetrem Capital Management.

Judging by the fact that Agrium Inc. (USA) (NYSE:AGU) has witnessed falling interest from the smart money, we can see that there lies a certain “tier” of money managers who sold off their entire stakes last quarter. Interestingly, Daniel S. Och’s OZ Management sold off the biggest stake of all the hedgies we monitor, comprising about $25 million in stock., and John Burbank of Passport Capital was right behind this move, as the fund dumped about $19 million worth. These transactions are interesting, as total hedge fund interest was cut by 5 funds last quarter.

How are insiders trading Agrium Inc. (USA) (NYSE:AGU)?

Insider buying is at its handiest when the company in question has experienced transactions within the past six months. Over the latest half-year time frame, Agrium Inc. (USA) (NYSE:AGU) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

With the returns exhibited by the aforementioned time-tested strategies, retail investors should always pay attention to hedge fund and insider trading sentiment, and Agrium Inc. (USA) (NYSE:AGU) shareholders fit into this picture quite nicely.

Click here to learn more about Insider Monkey’s Hedge Fund Newsletter

Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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