Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Schweitzer-Mauduit International, Inc. (NYSE:SWM).
Is Schweitzer-Mauduit International a cheap investment now? Hedge funds are becoming more confident. The number of long hedge fund positions increased by 3 recently. 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 AAON, Inc. (NASDAQ:AAON), Navistar International Corp (NYSE:NAV), and Sonic Automotive Inc (NYSE:SAH) to gather more data points.
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To most investors, hedge funds are perceived as worthless, outdated financial tools of the past. While there are greater than 8000 funds trading today, We hone in on the masters of this group, around 700 funds. It is estimated that this group of investors orchestrate most of all hedge funds’ total asset base, and by keeping an eye on their unrivaled stock picks, Insider Monkey has spotted a number of investment strategies that have historically outperformed Mr. Market. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points annually for a decade in their back tests.
With all of this in mind, we’re going to take a look at the fresh action encompassing Schweitzer-Mauduit International, Inc. (NYSE:SWM).
How are hedge funds trading Schweitzer-Mauduit International, Inc. (NYSE:SWM)?
Heading into Q4, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of 27% from the previous quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Royce & Associates, managed by Chuck Royce, holds the largest position in Schweitzer-Mauduit International, Inc. (NYSE:SWM). Royce & Associates has a $58.2 million position in the stock, comprising 0.3% of its 13F portfolio. The second most bullish fund manager is Renaissance Technologies, which holds a $18.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish consist of Israel Englander’s Millennium Management, Ken Griffin’s Citadel Investment Group, and Glenn Russell Dubin’s Highbridge Capital Management.
