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Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the fourth quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of AGCO Corporation (NYSE:AGCO) based on that data.
AGCO Corporation (NYSE:AGCO) was in 40 hedge funds' portfolios at the end of December. The all time high for this statistic was previously 32. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. AGCO shareholders have witnessed an increase in hedge fund sentiment lately. There were 31 hedge funds in our database with AGCO holdings at the end of September. Our calculations also showed that AGCO isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 124 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Crispin Odey of Odey Asset Management Group
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Keeping this in mind let's take a look at the latest hedge fund action encompassing AGCO Corporation (NYSE:AGCO).
Do Hedge Funds Think AGCO Is A Good Stock To Buy Now?
At Q4's end, a total of 40 of the hedge funds tracked by Insider Monkey were long this stock, a change of 29% from the third quarter of 2020. The graph below displays the number of hedge funds with bullish position in AGCO over the last 22 quarters. With hedge funds' sentiment swirling, there exists a select group of notable hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
Among these funds, Citadel Investment Group held the most valuable stake in AGCO Corporation (NYSE:AGCO), which was worth $106.5 million at the end of the fourth quarter. On the second spot was Renaissance Technologies which amassed $60.5 million worth of shares. AQR Capital Management, Arrowstreet Capital, and GLG Partners were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Horseman Capital Management allocated the biggest weight to AGCO Corporation (NYSE:AGCO), around 7.98% of its 13F portfolio. Odey Asset Management Group is also relatively very bullish on the stock, designating 7.17 percent of its 13F equity portfolio to AGCO.
As industrywide interest jumped, key hedge funds have jumped into AGCO Corporation (NYSE:AGCO) headfirst. Odey Asset Management Group, managed by Crispin Odey, created the most outsized position in AGCO Corporation (NYSE:AGCO). Odey Asset Management Group had $28 million invested in the company at the end of the quarter. Alexander Mitchell's Scopus Asset Management also initiated a $21.9 million position during the quarter. The other funds with brand new AGCO positions are Ryan Caldwell's Chiron Investment Management, Doug Gordon, Jon Hilsabeck and Don Jabro's Shellback Capital, and Paul Marshall and Ian Wace's Marshall Wace LLP.
Let's check out hedge fund activity in other stocks similar to AGCO Corporation (NYSE:AGCO). These stocks are Acceleron Pharma Inc (NASDAQ:XLRN), Commerce Bancshares, Inc. (NASDAQ:CBSH), OneConnect Financial Technology Co., Ltd. (NYSE:OCFT), Churchill Downs Incorporated (NASDAQ:CHDN), Grupo Aval Acciones y Valores S.A. (NYSE:AVAL), Americold Realty Trust (NYSE:COLD), and Diamondback Energy Inc (NASDAQ:FANG). This group of stocks' market caps resemble AGCO's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position XLRN,34,1343619,0 CBSH,16,55715,1 OCFT,5,55761,-6 CHDN,25,377356,-3 AVAL,4,12206,0 COLD,29,913431,-1 FANG,34,412034,11 Average,21,452875,0.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $453 million. That figure was $589 million in AGCO's case. Acceleron Pharma Inc (NASDAQ:XLRN) is the most popular stock in this table. On the other hand Grupo Aval Acciones y Valores S.A. (NYSE:AVAL) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks AGCO Corporation (NYSE:AGCO) is more popular among hedge funds. Our overall hedge fund sentiment score for AGCO is 90. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks returned 5.3% in 2021 through March 19th but still managed to beat the market by 0.8 percentage points. Hedge funds were also right about betting on AGCO as the stock returned 39.8% since the end of December (through 3/19) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.