Clearwater Paper Corp (NYSE:CLW), Buckeye Technologies Inc. (NYSE:BKI): Is Schweitzer-Mauduit International, Inc. (NYSE:SWM) Going to Burn These Hedge Funds?

Is Schweitzer-Mauduit International, Inc. (NYSE:SWM) a buy here? Prominent investors are reducing their bets on the stock. The number of bullish hedge fund bets shrunk by 1 recently.

In the financial world, there are tons of gauges market participants can use to analyze the equity markets. A couple of the best are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the top picks of the best hedge fund managers can trounce the S&P 500 by a healthy amount (see just how much).

Just as key, bullish insider trading activity is a second way to break down the marketplace. Obviously, there are a variety of motivations for an upper level exec to cut shares of his or her company, but only one, very clear reason why they would behave bullishly. Plenty of academic studies have demonstrated the market-beating potential of this tactic if shareholders know where to look (learn more here).

With these “truths” under our belt, it’s important to take a glance at the recent action regarding Schweitzer-Mauduit International, Inc. (NYSE:SWM).

How are hedge funds trading Schweitzer-Mauduit International, Inc. (NYSE:SWM)?

At the end of the fourth quarter, a total of 14 of the hedge funds we track were bullish in this stock, a change of -7% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes considerably.

Of the funds we track, Renaissance Technologies, managed by Jim Simons, holds the largest position in Schweitzer-Mauduit International, Inc. (NYSE:SWM). Renaissance Technologies has a $5.3 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Whitebox Advisors, managed by Andy Redleaf, which held a $4.3 million position; 0.2% of its 13F portfolio is allocated to the stock. Some other hedge funds that hold long positions include Joel Greenblatt’s Gotham Asset Management, Andrew R. Midler’s Savitr Capital and Chuck Royce’s Royce & Associates.

Because Schweitzer-Mauduit International, Inc. (NYSE:SWM) has faced a declination in interest from hedge fund managers, logic holds that there were a few money managers that decided to sell off their full holdings heading into 2013. Intriguingly, Israel Englander’s Millennium Management said goodbye to the biggest stake of all the hedgies we track, worth an estimated $2.2 million in stock.. Peter Algert and Kevin Coldiron’s fund, Algert Coldiron Investors, also sold off its stock, about $1.4 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 1 funds heading into 2013.

What do corporate executives and insiders think about Schweitzer-Mauduit International, Inc. (NYSE:SWM)?

Insider purchases made by high-level executives is at its handiest when the company we’re looking at has experienced transactions within the past 180 days. Over the latest 180-day time frame, Schweitzer-Mauduit International, Inc. (NYSE:SWM) has seen zero unique insiders buying, and 2 insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to Schweitzer-Mauduit International, Inc. (NYSE:SWM). These stocks are Resolute Forest Products Inc (NYSE:RFP), P.H. Glatfelter Company (NYSE:GLT), KapStone Paper and Packaging Corp. (NYSE:KS), Buckeye Technologies Inc. (NYSE:BKI), and Clearwater Paper Corp (NYSE:CLW). This group of stocks are the members of the paper & paper products industry and their market caps match SWM’s market cap.

With the results exhibited by our studies, everyday investors should always watch hedge fund and insider trading activity, and Schweitzer-Mauduit International, Inc. (NYSE:SWM) is no exception.

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