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This Metric Says You Are Smart to Sell Monsanto Company (NYSE:MON)

Monsanto Company (NYSE:MON) investors should pay attention to a decrease in support from the world’s most elite money managers recently.

Monsanto Company (NYSE:MON)

In the eyes of most market participants, hedge funds are seen as unimportant, old investment tools of the past. While there are more than 8000 funds with their doors open today, we look at the upper echelon of this club, close to 450 funds. It is widely believed that this group oversees most of all hedge funds’ total capital, and by keeping an eye on their highest performing equity investments, we have figured out a number of investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points annually 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 outperformed the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).

Equally as beneficial, bullish insider trading sentiment is a second way to break down the investments you’re interested in. As the old adage goes: there are lots of motivations for an insider to get rid of shares of his or her company, but just one, very obvious reason why they would buy. Plenty of empirical studies have demonstrated the impressive potential of this strategy if piggybackers know what to do (learn more here).

Consequently, let’s take a gander at the key action encompassing Monsanto Company (NYSE:MON).

What does the smart money think about Monsanto Company (NYSE:MON)?

In preparation for this year, a total of 54 of the hedge funds we track were long in this stock, a change of -8% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their stakes substantially.

According to our comprehensive database, Lone Pine Capital, managed by Stephen Mandel, holds the biggest position in Monsanto Company (NYSE:MON). Lone Pine Capital has a $507 million billion position in the stock, comprising 3.2% of its 13F portfolio. On Lone Pine Capital’s heels is Blue Ridge Capital, managed by John Griffin, which held a $287 million position; the fund has 4% of its 13F portfolio invested in the stock. Remaining peers that are bullish include Phill Gross and Robert Atchinson’s Adage Capital Management, Donald Chiboucis’s Columbus Circle Investors and John Armitage’s Egerton Capital Limited.

Due to the fact that Monsanto Company (NYSE:MON) has experienced a declination in interest from hedge fund managers, logic holds that there exists a select few hedge funds who were dropping their full holdings in Q4. Intriguingly, Roberto Mignone’s Bridger Management dumped the biggest position of the 450+ funds we watch, totaling close to $41 million in stock., and John Kleinheinz of Kleinheinz Capital Partners was right behind this move, as the fund cut about $29 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 5 funds in Q4.

How are insiders trading Monsanto Company (NYSE:MON)?

Insider purchases made by high-level executives is best served when the company in focus has seen transactions within the past half-year. Over the last 180-day time frame, Monsanto Company (NYSE:MON) has experienced zero unique insiders purchasing, and 8 insider sales (see the details of insider trades here).

With the returns shown by our time-tested strategies, everyday investors must always keep an eye on hedge fund and insider trading activity, and Monsanto Company (NYSE:MON) is an important part of this process.

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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