Is The Mosaic Company (MOS) Going to Burn These Hedge Funds?

·5 min read

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 third 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 6 years and analyze what the smart money thinks of The Mosaic Company (NYSE:MOS) based on that data.

The Mosaic Company (NYSE:MOS) shareholders have witnessed a decrease in hedge fund interest recently. The Mosaic Company (NYSE:MOS) was in 40 hedge funds' portfolios at the end of September. The all time high for this statistic is 43. Our calculations also showed that MOS isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind we're going to take a peek at the recent hedge fund action regarding The Mosaic Company (NYSE:MOS).

Bruce Kovner, Caxton Associates LP
Bruce Kovner, Caxton Associates LP

Bruce Kovner of Caxton Associates LP

Do Hedge Funds Think MOS Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 40 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -7% from the previous quarter. The graph below displays the number of hedge funds with bullish position in MOS over the last 25 quarters. With hedge funds' sentiment swirling, there exists a select group of key hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Kerr Neilson's Platinum Asset Management has the biggest position in The Mosaic Company (NYSE:MOS), worth close to $137.1 million, comprising 3.9% of its total 13F portfolio. On Platinum Asset Management's heels is Slate Path Capital, led by David Greenspan, holding a $118.2 million position; 5.4% of its 13F portfolio is allocated to the company. Some other peers with similar optimism comprise Phill Gross and Robert Atchinson's Adage Capital Management, Cliff Asness's AQR Capital Management and David Tepper's Appaloosa Management LP. In terms of the portfolio weights assigned to each position Brightline Capital allocated the biggest weight to The Mosaic Company (NYSE:MOS), around 10.47% of its 13F portfolio. Slate Path Capital is also relatively very bullish on the stock, earmarking 5.4 percent of its 13F equity portfolio to MOS.

Since The Mosaic Company (NYSE:MOS) has faced bearish sentiment from the smart money, logic holds that there lies a certain "tier" of money managers who sold off their entire stakes last quarter. Interestingly, Steve Cohen's Point72 Asset Management dumped the biggest investment of the "upper crust" of funds tracked by Insider Monkey, comprising an estimated $25.5 million in stock. Simon Sadler's fund, Segantii Capital, also said goodbye to its stock, about $21.7 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 3 funds last quarter.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as The Mosaic Company (NYSE:MOS) but similarly valued. These stocks are Vail Resorts, Inc. (NYSE:MTN), Suzano S.A. (NYSE:SUZ), GameStop Corp. (NYSE:GME), Howmet Aerospace Inc. (NYSE:HWM), Futu Holdings Limited (NASDAQ:FUTU), Citrix Systems, Inc. (NASDAQ:CTXS), and WestRock Company (NYSE:WRK). This group of stocks' market valuations are similar to MOS's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MTN,40,644916,0 SUZ,6,47280,2 GME,9,80933,-9 HWM,44,3495496,-3 FUTU,23,664044,-8 CTXS,24,766516,1 WRK,34,719952,2 Average,25.7,917020,-2.1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 25.7 hedge funds with bullish positions and the average amount invested in these stocks was $917 million. That figure was $913 million in MOS's case. Howmet Aerospace Inc. (NYSE:HWM) is the most popular stock in this table. On the other hand Suzano S.A. (NYSE:SUZ) is the least popular one with only 6 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. Our overall hedge fund sentiment score for MOS is 74.6. 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. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately MOS wasn't nearly as popular as these 5 stocks and hedge funds that were betting on MOS were disappointed as the stock returned -4.2% since the end of September (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.

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