Do Hedge Funds Love Archer Daniels Midland Company (ADM)?

Due to the fact that Archer Daniels Midland Company (NYSE:ADM) has witnessed declining sentiment from the smart money, it’s easy to see that there lies a certain “tier” of fund managers that elected to cut their entire stakes by the end of the third quarter. At the top of the heap, Joel Greenblatt’s Gotham Asset Management dumped the biggest position of all the hedgies tracked by Insider Monkey, valued at about $16.9 million in stock. Malcolm Fairbairn’s fund, Ascend Capital, also dropped its holding, about $8.6 million worth of shares. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now review hedge fund activity in other stocks similar to Archer Daniels Midland Company (NYSE:ADM). We will take a look at Cardinal Health, Inc. (NYSE:CAH), Southwest Airlines Co. (NYSE:LUV), AFLAC Incorporated (NYSE:AFL), and Nokia Corporation (ADR) (NYSE:NOK). This group of stocks’ market caps are similar to ADM’s market cap.

As you can see these stocks had an average of 37 hedge funds with bullish positions and the average amount invested in these stocks was $1.14 billion. That figure was $826 million in ADM’s case. Southwest Airlines Co. (NYSE:LUV) is the most popular stock in this table, whereas Nokia Corporation (ADR) (NYSE:NOK) is the least popular one with only 24 bullish hedge fund positions. Archer Daniels Midland Company (NYSE:ADM) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard LUV might be a better candidate to consider a long position.