American Vanguard Corp. (AVD): Are Hedge Funds Right About This Stock?

American Vanguard Corp. (NYSE:AVD) was in 14 hedge funds’ portfolio at the end of March. AVD has experienced an increase in hedge fund sentiment of late. There were 11 hedge funds in our database with AVD positions at the end of the previous quarter.

If you’d ask most market participants, hedge funds are perceived as slow, old financial tools of years past. While there are over 8000 funds trading today, we look at the moguls of this club, close to 450 funds. It is estimated that this group has its hands on most of all hedge funds’ total asset base, and by monitoring their highest performing stock picks, we have found a number of investment strategies that have historically beaten the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).

Just as beneficial, optimistic insider trading activity is another way to break down the financial markets. Obviously, there are many incentives for an insider to get rid of shares of his or her company, but only one, very simple reason why they would buy. Plenty of empirical studies have demonstrated the valuable potential of this method if “monkeys” know where to look (learn more here).

Consequently, let’s take a peek at the key action regarding American Vanguard Corp. (NYSE:AVD).

What have hedge funds been doing with American Vanguard Corp. (NYSE:AVD)?

At Q1’s end, a total of 14 of the hedge funds we track were long in this stock, a change of 27% from the first quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes considerably.

Of the funds we track, Jim Simons’s Renaissance Technologies had the most valuable position in American Vanguard Corp. (NYSE:AVD), worth close to $14.9 million, accounting for less than 0.1%% of its total 13F portfolio. On Renaissance Technologies’s heels is Goodnow Investment Group, managed by Edward Goodnow, which held a $2.8 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Some other peers that are bullish include Ken Griffin’s Citadel Investment Group, Matthew Hulsizer’s PEAK6 Capital Management and Israel Englander’s Millennium Management.

As aggregate interest increased, key money managers were breaking ground themselves. Goodnow Investment Group, managed by Edward Goodnow, created the largest position in American Vanguard Corp. (NYSE:AVD). Goodnow Investment Group had 2.8 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $1.6 million position during the quarter. The other funds with brand new AVD positions are Mike Vranos’s Ellington, David Costen Haley’s HBK Investments, and Ken Gray and Steve Walsh’s Bryn Mawr Capital.

Insider trading activity in American Vanguard Corp. (NYSE:AVD)

Insider purchases made by high-level executives is most useful when the primary stock in question has experienced transactions within the past 180 days. Over the latest 180-day time period, American Vanguard Corp. (NYSE:AVD) has seen zero unique insiders purchasing, and 3 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to American Vanguard Corp. (NYSE:AVD). These stocks are Terra Nitrogen Company, L.P. (NYSE:TNH), Scotts Miracle-Gro Co (NYSE:SMG), CVR Partners LP (NYSE:UAN), Intrepid Potash, Inc. (NYSE:IPI), and Rentech Nitrogen Partners LP (NYSE:RNF). All of these stocks are in the agricultural chemicals industry and their market caps are similar to AVD’s market cap.