CF Industries Holdings, Inc. (NYSE:CF) shareholders have witnessed a decrease in hedge fund sentiment lately.
In the 21st century investor’s toolkit, there are plenty of metrics investors can use to watch publicly traded companies. Two of the most under-the-radar are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best investment managers can trounce the market by a significant amount (see just how much).
Equally as important, optimistic insider trading activity is a second way to break down the investments you’re interested in. Obviously, there are a variety of motivations for an insider to get rid of shares of his or her company, but only one, very clear reason why they would behave bullishly. Various academic studies have demonstrated the useful potential of this method if piggybackers know where to look (learn more here).
Consequently, it’s important to take a gander at the recent action regarding CF Industries Holdings, Inc. (NYSE:CF).
What have hedge funds been doing with CF Industries Holdings, Inc. (NYSE:CF)?
In preparation for this year, a total of 40 of the hedge funds we track held long positions in this stock, a change of -17% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their holdings significantly.
When looking at the hedgies we track, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in CF Industries Holdings, Inc. (NYSE:CF). Renaissance Technologies has a $207 million billion position in the stock, comprising 0.6% of its 13F portfolio. On Renaissance Technologies’s heels is Adage Capital Management, managed by Phill Gross and Robert Atchinson, which held a $203 million position; the fund has 0.7% of its 13F portfolio invested in the stock. Other hedge funds with similar optimism include Rob Citrone’s Discovery Capital Management, Sean Cullinan’s Point State Capital and Cliff Asness’s AQR Capital Management.
Because CF Industries Holdings, Inc. (NYSE:CF) has witnessed bearish sentiment from hedge fund managers, it’s safe to say that there was a specific group of hedgies that decided to sell off their positions entirely in Q4. Intriguingly, John Armitage’s Egerton Capital Limited dropped the largest investment of the 450+ funds we monitor, totaling close to $130 million in stock.. Anand Parekh’s fund, Alyeska Investment Group, also cut its stock, about $31 million worth. These transactions are important to note, as total hedge fund interest dropped by 8 funds in Q4.
How have insiders been trading CF Industries Holdings, Inc. (NYSE:CF)?
Bullish insider trading is particularly usable when the company we’re looking at has experienced transactions within the past half-year. Over the last six-month time frame, CF Industries Holdings, Inc. (NYSE:CF) has seen zero unique insiders buying, and 3 insider sales (see the details of insider trades here).
With the results shown by our time-tested strategies, everyday investors should always keep an eye on hedge fund and insider trading sentiment, and CF Industries Holdings, Inc. (NYSE:CF) shareholders fit into this picture quite nicely.
Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.