Is Deere & Company (NYSE:DE) worth your attention right now? Prominent investors are becoming hopeful. The number of long hedge fund bets advanced by 2 in recent months.
To most investors, hedge funds are viewed as slow, outdated investment vehicles of yesteryear. While there are more than 8000 funds with their doors open at present, we at Insider Monkey choose to focus on the leaders of this club, around 450 funds. It is estimated that this group oversees most of the smart money’s total capital, and by keeping an eye on their best picks, we have figured out a few investment strategies that have historically outperformed Mr. Market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as integral, optimistic insider trading activity is another way to break down the financial markets. Obviously, there are plenty of incentives for an insider to downsize shares of his or her company, but only one, very clear reason why they would buy. Plenty of empirical studies have demonstrated the useful potential of this tactic if investors understand what to do (learn more here).
Consequently, let’s take a look at the latest action regarding Deere & Company (NYSE:DE).
How have hedgies been trading Deere & Company (NYSE:DE)?
In preparation for this quarter, a total of 33 of the hedge funds we track were long in this stock, a change of 6% from the previous quarter. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings significantly.
When looking at the hedgies we track, Berkshire Hathaway, managed by Warren Buffett, holds the largest position in Deere & Company (NYSE:DE). Berkshire Hathaway has a $342.1 million position in the stock, comprising 0.4% of its 13F portfolio. Coming in second is GAMCO Investors, managed by Mario Gabelli, which held a $127.7 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Some other hedge funds with similar optimism include Donald Chiboucis’s Columbus Circle Investors, Tony Chedraoui’s Tyrus Capital and Phill Gross and Robert Atchinson’s Adage Capital Management.
Consequently, specific money managers were leading the bulls’ herd. Tyrus Capital, managed by Tony Chedraoui, assembled the largest position in Deere & Company (NYSE:DE). Tyrus Capital had 32 million invested in the company at the end of the quarter. Bart Baum’s Ionic Capital Management also initiated a $6.9 million position during the quarter. The other funds with new positions in the stock are David Harding’s Winton Capital Management, Israel Englander’s Millennium Management, and David Costen Haley’s HBK Investments.
What have insiders been doing with Deere & Company (NYSE:DE)?
Insider purchases made by high-level executives is most useful when the company in question has seen transactions within the past 180 days. Over the latest 180-day time frame, Deere & Company (NYSE:DE) has seen zero unique insiders buying, and 8 insider sales (see the details of insider trades here).
Let’s check out hedge fund and insider activity in other stocks similar to Deere & Company (NYSE:DE). These stocks are Terex Corporation (NYSE:TEX), AGCO Corporation (NYSE:AGCO), Joy Global Inc. (NYSE:JOY), CNH Global NV (ADR) (NYSE:CNH), and Caterpillar Inc. (NYSE:CAT). This group of stocks belong to the farm & construction machinery industry and their market caps are similar to DE’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Terex Corporation (NYSE:TEX)||30||2||8|
|AGCO Corporation (NYSE:AGCO)||25||2||5|
|Joy Global Inc. (NYSE:JOY)||31||0||2|
|CNH Global NV (ADR) (NYSE:CNH)||23||0||0|
|Caterpillar Inc. (NYSE:CAT)||36||0||5|
With the returns exhibited by Insider Monkey’s strategies, retail investors must always keep an eye on hedge fund and insider trading activity, and Deere & Company (NYSE:DE) applies perfectly to this mantra.