Out of thousands of stocks that are currently traded on the market, it is difficult to determine those that can really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs. These industry experts are well connected to get tips from insiders on top of their own expertise as well. Individual investors can piggyback these hedge funds and may be able to benefit from their vast resources. We analyze the quarterly 13F filings of over 700 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about AGCO Corporation (NYSE:AGCO).
AGCO Corporation (NYSE:AGCO) was in 24 hedge funds’ portfolios at the end of September. AGCO investors should pay attention to an increase in hedge fund sentiment lately. There were 16 hedge funds in our database with AGCO holdings at the end of the previous quarter. At the end of this article we will also compare AGCO to other stocks including Credit Acceptance Corp. (NASDAQ:CACC), Spirit Realty Capital Inc (NYSE:SRC), and Phillips 66 Partners LP (NYSE:PSXP) to get a better sense of its popularity.
Today there are numerous gauges investors can use to assess their stock investments. A duo of the most under-the-radar gauges are hedge fund and insider trading signals. Experts at hedge fund tracking site Insider Monkey have shown that, historically, those who follow the best picks of the best fund managers can beat the broader indices by a superb margin (see the details here).
Now, let’s take a look at the fresh action regarding AGCO Corporation (NYSE:AGCO).
Hedge fund activity in AGCO Corporation (NYSE:AGCO)
Heading into Q4, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a surge of 50% from the previous quarter. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their holdings considerably.
When looking at the hedgies followed by Insider Monkey, Clifton S. Robbins’ Blue Harbour Group has the most valuable position in AGCO Corporation (NYSE:AGCO), worth close to $304 million, comprising 9.5% of its total 13F portfolio. On Blue Harbour Group’s heels is Third Avenue Management, led by Martin Whitman, holding an $85.7 million position; 2.3% of its 13F portfolio is allocated to the stock. Remaining peers with similar optimism contain Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC, Cliff Asness’ AQR Capital Management, and Clint Murray’s Lodge Hill Capital.
As aggregate interest increased, key money managers have jumped into AGCO Corporation (NYSE:AGCO) headfirst. Lodge Hill Capital assembled the biggest position in AGCO Corporation (NYSE:AGCO). Lodge Hill Capital had $7.9 million invested in the company at the end of the quarter. Neil Chriss’ Hutchin Hill Capital also made a $4.8 million investment in the stock during the quarter. The following funds were also among the new AGCO investors: Steve Cohen’s Point72 Asset Management, George Hall’s Clinton Group, and Dmitry Balyasny’s Balyasny Asset Management.
Let’s also review hedge fund activity in other stocks similar to AGCO Corporation (NYSE:AGCO). These stocks are Credit Acceptance Corp. (NASDAQ:CACC), Spirit Realty Capital Inc (NYSE:SRC), Phillips 66 Partners LP (NYSE:PSXP), and Endurance Specialty Holdings Ltd. (NYSE:ENH). This group of stocks’ market values are similar to AGCO’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 18.25 hedge funds with bullish positions and the average amount invested in these stocks was $280 million, while $520 million was invested in AGCO. Spirit Realty Capital Inc (NYSE:SRC) is the most popular stock in this table. On the other hand Phillips 66 Partners LP (NYSE:PSXP) is the least popular one with only seven bullish hedge fund positions. AGCO Corporation (NYSE:AGCO) is not the most popular stock in this group but hedge fund interest is still above average, as is the amount of capital invested in it. This is a slightly positive signal and given the rapidly increasing interest in the stock among smart money investors, we think more research into the stock is warranted.