The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of The Mosaic Company (NYSE:MOS).
Hedge fund interest in The Mosaic Company (NYSE:MOS) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as 51job, Inc. (NASDAQ:JOBS), Teck Resources Ltd (NYSE:TECK), and Churchill Downs Incorporated (NASDAQ:CHDN) to gather more data points. Our calculations also showed that MOS isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
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 58 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 36% through May 18th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
[caption id="attachment_140292" align="aligncenter" width="400"] Israel Englander of Millennium Management[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one as well as this tiny lithium play. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let's take a peek at the key hedge fund action encompassing The Mosaic Company (NYSE:MOS).
What does smart money think about The Mosaic Company (NYSE:MOS)?
At Q1's end, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in MOS over the last 18 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Phill Gross and Robert Atchinson's Adage Capital Management has the number one position in The Mosaic Company (NYSE:MOS), worth close to $123.3 million, comprising 0.4% of its total 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, led by Ken Griffin, holding a $93.8 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining professional money managers with similar optimism consist of David Greenspan's Slate Path Capital, Israel Englander's Millennium Management and D. E. Shaw's D E Shaw. In terms of the portfolio weights assigned to each position Slate Path Capital allocated the biggest weight to The Mosaic Company (NYSE:MOS), around 5.43% of its 13F portfolio. East Side Capital (RR Partners) is also relatively very bullish on the stock, setting aside 2.79 percent of its 13F equity portfolio to MOS.
Since The Mosaic Company (NYSE:MOS) has witnessed declining sentiment from the aggregate hedge fund industry, it's easy to see that there was a specific group of funds that elected to cut their full holdings last quarter. Interestingly, Renaissance Technologies dropped the biggest position of the 750 funds monitored by Insider Monkey, worth about $19 million in stock, and Brian J. Higgins's King Street Capital was right behind this move, as the fund cut about $15.1 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's check out hedge fund activity in other stocks similar to The Mosaic Company (NYSE:MOS). We will take a look at 51job, Inc. (NASDAQ:JOBS), Teck Resources Ltd (NYSE:TECK), Churchill Downs Incorporated (NASDAQ:CHDN), and Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC). This group of stocks' market values are closest to MOS's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position JOBS,9,18622,1 TECK,24,259343,-6 CHDN,31,444952,-1 TKC,3,40169,-4 Average,16.75,190772,-2.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $191 million. That figure was $387 million in MOS's case. Churchill Downs Incorporated (NASDAQ:CHDN) is the most popular stock in this table. On the other hand Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) is the least popular one with only 3 bullish hedge fund positions. The Mosaic Company (NYSE:MOS) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but beat the market by 13.2 percentage points. Unfortunately MOS wasn't nearly as popular as these 10 stocks and hedge funds that were betting on MOS were disappointed as the stock returned 11.7% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.