Do Hedge Funds Love Adecoagro SA (AGRO)?
The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on September 30th. We at Insider Monkey have made an extensive database of nearly 750 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Adecoagro SA (NYSE:AGRO) based on those filings.
Is Adecoagro SA (NYSE:AGRO) a sound investment right now? The best stock pickers are in an optimistic mood. The number of bullish hedge fund bets rose by 4 recently. Our calculations also showed that AGRO isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). AGRO was in 16 hedge funds' portfolios at the end of September. There were 12 hedge funds in our database with AGRO positions at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To most stock holders, hedge funds are perceived as worthless, outdated investment tools of yesteryear. While there are over 8000 funds in operation today, Our researchers look at the moguls of this club, about 750 funds. These money managers handle most of the hedge fund industry's total capital, and by shadowing their first-class stock picks, Insider Monkey has formulated many investment strategies that have historically beaten the market. Insider Monkey's flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
[caption id="attachment_365194" align="alignnone" width="600"]
David E. Shaw of D.E. Shaw[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. Let's take a glance at the key hedge fund action regarding Adecoagro SA (NYSE:AGRO).
How are hedge funds trading Adecoagro SA (NYSE:AGRO)?
At Q3's end, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from the second quarter of 2019. On the other hand, there were a total of 16 hedge funds with a bullish position in AGRO a year ago. With hedge funds' positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Route One Investment Company, managed by William Duhamel, holds the most valuable position in Adecoagro SA (NYSE:AGRO). Route One Investment Company has a $66.6 million position in the stock, comprising 2% of its 13F portfolio. On Route One Investment Company's heels is EMS Capital, managed by Edmond M. Safra, which holds a $65.7 million position; the fund has 5.2% of its 13F portfolio invested in the stock. Some other peers that are bullish encompass David E. Shaw's D E Shaw, Ron Mass's Almitas Capital and Crispin Odey's Odey Asset Management Group. In terms of the portfolio weights assigned to each position EMS Capital allocated the biggest weight to Adecoagro SA (NYSE:AGRO), around 5.24% of its 13F portfolio. Almitas Capital is also relatively very bullish on the stock, setting aside 4.17 percent of its 13F equity portfolio to AGRO.
As one would reasonably expect, key hedge funds have been driving this bullishness. Odey Asset Management Group, managed by Crispin Odey, assembled the biggest position in Adecoagro SA (NYSE:AGRO). Odey Asset Management Group had $3.3 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also initiated a $1.8 million position during the quarter. The other funds with brand new AGRO positions are Jody LaNasa's Serengeti Asset Management, Jonathan Barrett and Paul Segal's Luminus Management, and John Overdeck and David Siegel's Two Sigma Advisors.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Adecoagro SA (NYSE:AGRO) but similarly valued. We will take a look at Mesoblast Limited (NASDAQ:MESO), Newpark Resources Inc (NYSE:NR), Kura Oncology, Inc. (NASDAQ:KURA), and Loma Negra Compania Industrial Argentina Sociedad Anonima (NYSE:LOMA). All of these stocks' market caps are similar to AGRO's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MESO,2,576,1 NR,10,25078,2 KURA,18,192205,-4 LOMA,9,21002,-5 Average,9.75,59715,-1.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.75 hedge funds with bullish positions and the average amount invested in these stocks was $60 million. That figure was $153 million in AGRO's case. Kura Oncology, Inc. (NASDAQ:KURA) is the most popular stock in this table. On the other hand Mesoblast Limited (NASDAQ:MESO) is the least popular one with only 2 bullish hedge fund positions. Adecoagro SA (NYSE:AGRO) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on AGRO as the stock returned 18% during the fourth quarter (through the end of November) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
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