Is Mosaic Co (NYSE:MOS) an exceptional investment now? The smart money is turning less bullish. The number of bullish hedge fund positions were trimmed by 4 in recent months.
In the eyes of most traders, hedge funds are assumed to be underperforming, outdated investment vehicles of years past. While there are over 8000 funds trading at the moment, we look at the masters of this club, about 450 funds. It is estimated that this group oversees most of the hedge fund industry's total capital, and by tracking their top stock picks, we have determined a number of investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outperformed 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 beaten the S&P 500 index by 25 percentage points in 6.5 month (see all of our picks from August).
Equally as beneficial, bullish insider trading activity is a second way to break down the marketplace. Just as you'd expect, there are a number of incentives for an upper level exec to drop shares of his or her company, but only one, very obvious reason why they would behave bullishly. Various academic studies have demonstrated the useful potential of this tactic if piggybackers know what to do (learn more here).
With all of this in mind, it's important to take a gander at the recent action surrounding Mosaic Co (NYSE:MOS).
At year's end, a total of 35 of the hedge funds we track were bullish in this stock, a change of -10% from the previous quarter. With hedgies' capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their stakes meaningfully.
Of the funds we track, Steven Cohen's SAC Capital Advisors had the largest position in Mosaic Co (NYSE:MOS), worth close to $122 million billion, accounting for 0.6% of its total 13F portfolio. The second largest stake is held by Sean Cullinan of Point State Capital, with a $62 million position; the fund has 0.9% of its 13F portfolio invested in the stock. Some other peers that are bullish include Phill Gross and Robert Atchinson's Adage Capital Management, Richard Chilton's Chilton Investment Company and Malcolm Fairbairn's Ascend Capital.
Since Mosaic Co (NYSE:MOS) has faced declining sentiment from the entirety of the hedge funds we track, it's easy to see that there exists a select few hedge funds that decided to sell off their entire stakes in Q4. It's worth mentioning that Michael Kaufman's MAK Capital One sold off the largest investment of the 450+ funds we monitor, totaling close to $95 million in stock., and Michael Karsch of Karsch Capital Management was right behind this move, as the fund cut about $55 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 4 funds in Q4.
Insider buying is best served when the company in question has seen transactions within the past half-year. Over the last six-month time frame, Mosaic Co (NYSE:MOS) has seen 1 unique insiders buying, and zero insider sales (see the details of insider trades here).
With the results exhibited by the aforementioned strategies, everyday investors should always keep an eye on hedge fund and insider trading sentiment, and Mosaic Co (NYSE:MOS) applies perfectly to this mantra.
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.