Legendary fund managers such as Warren Buffett, George Soros, Carl Icahn, Steven Cohen and Mario Gabelli, are bullish on the agricultural chemicals group, adding a net $1.02 billion during the June quarter to their $1.74 billion prior quarter position in the agricultural chemicals group. Furthermore, overall they are under-weight in the group by a factor of 0.52; that is, taken together, the 60+ high alpha generating legendary or guru fund managers have invested 0.64% of their assets in the group, significantly less than the 1.22% weighting of the group in the overall market.
The hedge fund and mutual fund managers included in this group include only high profile names who by virtue of their long-term market-beating returns have earned their standing in the investment community and are worthy of our attention. They include well-known names such as those mentioned above, as well as perhaps relatively lesser-known names that also have a stellar long-term history of beating the markets, such as Seth Klarman, John Griffin, Prem Watsa, Robert Karr and Lee Ainslie. The following are the agricultural chemical group stocks that these guru funds are most bullish and bearish about (see Table):
Gurus Bullish on Mosaic Inc. (MOS): The Mosaic Company is one of the world’s leading producers and marketers of concentrated phosphate and potash crop nutrients for the global agriculture industry. Nine guru funds together hold $839 million, adding a net $594 million during the June quarter, thereby more than tripling their prior quarter $245 million position in the company. Major buyers included Viking Global Investors LP ($163 million), Third Point LLC ($157 million), Appaloosa Management LP ($157 million), and Perry Corp. ($91 million).
Gurus Bullish on Monsanto Co (MON): MON is a manufacturer of corn and other crop seeds and crop protection products for growers worldwide. Twelve guru funds together hold $597 million, adding a net $124 million during the June quarter. Major buyers included Lone Pine Capital LLC ($190 million) and Blue Ridge Capital Holdings LLC ($139 million); Soros Fund Management LLC was a major seller, selling $178 million of company stock during the quarter.
Gurus Bullish on Agrium Inc. (AGU): AGU manufactures nitrogen, potash, and phosphate-based fertilizers and other agricultural products and services. Five guru funds together hold $143 million, adding $137 million during the June quarter. Major buyers included Viking Global Investors LP ($99 million) and Fisher Asset Management LLC ($37 million).
Gurus Neutral on Potash Corporation of Saskatchewan, Inc. (POT): POT is the world's largest integrated fertilizer and related industrial and feed products company by capacity. It is the largest producer of potash worldwide by capacity, the third largest producer of phosphates worldwide by capacity, and the third largest nitrogen producer worldwide by ammonia capacity. Ten guru funds together hold $494 million, adding a net $15 million during the quarter. Major holders of POT include Viking Global Investors LP ($290 million) and Pabrai Investment Funds ($55 million).
Gurus Bullish on CF Industries Holdings (CF): CF is a manufacturer of phosphate fertilizers, including urea, ammonia, and urea ammonium nitrate in North America. Seven guru funds together hold $257 million, adding a net $52 million during the quarter. Appaloosa Management LP is the major guru holder of CF owning $146 million of company stock, and the major buyers included Kingdon Capital Management LLC ($42 million) and Balyasny Asset Management LLC ($32 million).
Gurus Bullish on Sociedad Quimica Y Minra (SQM): SQM is a Chilean producer of specialty fertilizers, iodine, industrial chemicals and other products sold worldwide. Three guru funds together hold $99 million, adding a net $28 million during the quarter. Major holders include Columbia Wagner Asset Management LLC ($71 million), Driehaus Capital Management ($15 million) and Fisher Asset Management LLC ($13 million).
Gurus Bullish on Scotts Miracle-gro Co. (SMG): SMG manufactures lawn and garden products, including fertilizers and plant food. Five guru funds together hold a major $87 million position in this small $2.8 billion market-cap company, adding a net $2 million during the quarter. Fisher Asset Management LLC with $79 million of company stock is the only major guru holder, with GAMCO Investors ($4 million) and Oakmark Funds/ Harris Associates LP ($1 million) owning minor positions in the company.
Gurus Neutral on LSB Industries Inc. (LXU): LXU manufactures agricultural, mining and industrial chemicals, and climate control products used in construction. Four guru funds together hold $79 million, adding a net $61 million during the quarter. Royce & Associates LLC adding $61 million was the only major buyer in the company, with three guru funds unloading minor positions, including Driehaus Capital Management ($3 million), RS Investment Management ($2 million) and SAC Capital Advisors LP (<$1 million).
Furthermore, as illustrated in the following table, gurus also have limited or no holding and hence are bearish on Terra Nitrogen Co. (TNH), a manufacturer of fertilizers, including urea, ammonium nitrate and ammonia, currently trading at a $2.6 billion market-cap; and CVR Partners LP (UAN), a manufacturer of nitrogen fertilizers utilizing a petroleum coke gasification process primarily for the agricultural market, currently trading at a $1.8 billion market-cap.
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