Agrochemicals or agricultural chemicals represent chemical products that are primarily used for crop protection. The majority of players within this industry constantly seek for newly-invented and technologically advanced products that can enhance the production of crops. The demand for crops is set to grow at a steady rate in the years and decades ahead, along with the global population growth. At the end of the day, we all need to eat in order to obtain energy to growth, move, and restore our bodies. That being said, in the following article we will present a list of five agrochemicals stocks that have been favored by the hedge funds monitored by Insider Monkey. As you will notice later on in the article, the list is constructed based on the hedge fund sentiment.
And why does Insider Monkey pay attention to hedge fund sentiment? Most investors ignore hedge funds’ moves because as a group their average net returns trailed the market since 2008 by a large margin. Unfortunately, most investors don’t realize that hedge funds are hedged and they also charge an arm and a leg, so they are likely to underperform the market in a bull market. We ignore their short positions and by imitating hedge funds’ stock picks independently, we don’t have to pay them a dime. Our research has shown that hedge funds’ long stock picks generate strong risk adjusted returns. For instance the 15 most popular small-cap stocks outperformed the S&P 500 Index by an average of 95 basis points per month in our back-tests spanning the 1999-2012 period. We have been tracking the performance of these stocks in real-time since the end of August 2012. After all, things change and we need to verify that back-test results aren’t just a statistical fluke. We weren’t proven wrong. These 15 stocks managed to return more than 118% over the last 36 months and outperformed the S&P 500 Index by 60 percentage points (see the details here).
5. Agrium Inc. (USA) (NYSE:AGU)
Investors with Long Positions (as of June 30): 29
Aggregate Value of Investors’ Holdings (as of June 30): $1.39 Billion
The number of hedge funds with positions in Agrium Inc. (USA) (NYSE:AGU) at the end of the second quarter was up by five compared to the end of March, while the value of investors’ holdings climbed by $251.77 million. Earlier this month, Loveland Products, a subsidiary of Agrium, revealed a new product for residue management and nutrient release from crop residues. This is what this industry is all about – finding new ways to improve the efficiency of crop-related activities and processes. Agrium’s shares are currently trading at relatively the same price level as at the beginning of the year. Jeffrey Ubben’s ValueAct Capital owns 10.00 million shares of Agrium Inc. (USA) (NYSE:AGU), the value of which account for 5.58% of the fund’s equity portfolio as of June 30.