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Hedge funds

Another victory: Large hedge funds begin selling off Monsanto stock amid too much 'drama'

Saturday, August 31, 2013 by: J. D. Heyes
Tags: hedge funds, Monsanto shares, stock market

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(NaturalNews) Well, it's not been a good year, stock-wise, for Monsanto, and we're okay with that.

The mega-biotech company has seen its shares roller-coaster for weeks, unable to get a decent run amid constant chaos in the marketplace, not the least of which has been the selling of Monsanto stock by big hedge funds.

That marketplace chaos has stemmed, in large part, from expanding awareness of genetically modified seeds and foods, the creation of which Monsanto has played the largest role.

Costing Monsanto money is the only way to get the agri-giant's attention

Per Arnold Frias at InsiderMonkey.com:

Now, according to many market players, hedge funds are seen as delayed, old investment vehicles of a forgotten age. Although there are over 8,000 hedge funds trading currently, Insider Monkey looks at the moguls of this group, around 525 funds. Analysts calculate that this group controls the lion's share of all hedge funds' total assets, and by monitoring their highest quality equity investments, we've figured out a few investment strategies that have historically outpaced the S&P 500.

Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we've began sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August). Just as crucial, positive insider trading sentiment is another way to look at the investments you're interested in. As the old adage goes: there are lots of stimuli for a bullish insider to drop shares of his or her company, but just one, very obvious reason why they would behave bullishly. Plenty of academic studies have demonstrated the impressive potential of this tactic if "monkeys" know what to do.

And with that, the latest information regarding Monsanto was examined.

Of the hedge funds followed by InsiderMonkey.com, the Lone Pine Fund held the most valuable position - close to $613.3 million, or 3 percent of the firm's total fiscal year '13 portfolio - in the agri-business giant.

On the heels of Lone Pine Capital is Andreas Halvorson of Viking Global, with a position of $414.5 million, or 2.3 percent of its FY '13 portfolio allocated to Monsanto.

Other peers with similar optimism include Phill Gross and Robert Atchinson's Adage Capital Management, John Griffin's Blue Ridge Capital and Jason Capello's Merchants' Gate Capital," writes Frias. "Since Monsanto Company has experienced declining interest from the entirety of the hedge funds we track, logic holds that there exists a select few hedgies that decided to sell off their positions entirely at the end of the second quarter."

One of the best ways to "influence" a giant like Monsanto is, of course, to make it lose money or, in this case, seem like a less inviting investment vehicle - which results in the same thing, a loss of value.

Dropping Monsanto stock a good thing

Frias said Jeffery Vinik's Vinik Asset Management was the firm that dumped the largest amount of Monsanto stock out of the 450-plus funds the site monitors. That total came to nearly $101 million.

Next, Sean Cullinan's fund, Point State Capital, dropped about $54.7 million worth of Monsanto paper.

"These transactions are interesting, as total hedge fund interest was cut by 4 funds at the end of the second quarter," Frias wrote.

Mike Adams, the Health Ranger, couldn't be more pleased.

"Monsanto executives and insiders are dumping Monsanto stock in record volumes, sending the stock price spiraling downward. CEO Hugh Grant just sold off 40,000 shares at $97.74, and both Janet Holloway and Gerald Steiner - both high-level Monsanto executives - recently ditched more than 10,000 shares each. Tom Hartley also bailed on another 6,000 shares at $100.15," he wrote recently.

"Hedge funds, meanwhile, are also dumping Monsanto stock, most likely due to sharply increased 'negative sentiment,'" he writes. "This means people increasingly don't like Monsanto, and that's a direct result of all the growing realizations about the dangers of GMOs, Monsanto's predatory business practices, the company's dangerous experiments that have already unleashed genetic pollution, and the fact that GM corn has been experimentally found to cause widespread cancer tumors in rat studies."




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