Is Mercer International Inc. (NASDAQ:MERC) a good investment?
In the financial world, there are tons of metrics market participants can use to track stocks. A couple of the most useful are hedge fund and insider trading interest. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the elite fund managers can outpace the market by a solid margin (see just how much).
Equally as necessary, bullish insider trading activity is a second way to look at the financial markets. There are lots of stimuli for an upper level exec to drop shares of his or her company, but only one, very simple reason why they would buy. Various empirical studies have demonstrated the valuable potential of this tactic if you know what to do (learn more here).
Furthermore, we’re going to discuss the newest info for Mercer International Inc. (NASDAQ:MERC).
How have hedgies been trading Mercer International Inc. (NASDAQ:MERC)?
Heading into Q3, a total of 10 of the hedge funds we track were long in this stock, a change of -9% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings significantly.
According to our 13F database, Gates Capital Management, managed by Jeffrey Gates, holds the largest position in Mercer International Inc. (NASDAQ:MERC). Gates Capital Management has a $50.5 million position in the stock, comprising 2.3% of its 13F portfolio. Sitting at the No. 2 spot is Kerr Neilson of Platinum Asset Management, with a $50 million position; 1% of its 13F portfolio is allocated to the stock. Some other peers that are bullish include Tom Wagner and Ara Cohen’s Knighthead Capital, Jonathan Kolatch’s Redwood Capital Management and Michael Johnston’s Steelhead Partners.
As Mercer International Inc. (NASDAQ:MERC) has faced a fall in interest from the smart money’s best and brightest, we can see that there is a sect of funds who sold off their entire stakes heading into Q2. Interestingly, Clint Coghill’s Coghill Capital Management cut the largest stake of the 450+ funds we track, valued at about $1.4 million in stock, and Paul Tanico of Castlerock Asset Management was right behind this move, as the fund said goodbye to about $1 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds heading into Q2.
What have insiders been doing with Mercer International Inc. (NASDAQ:MERC)?
Insider buying made by high-level executives is best served when the company in focus has experienced transactions within the past half-year. Over the latest six-month time period, Mercer International Inc. (NASDAQ:MERC) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).
We’ll also review the relationship between both of these indicators in other stocks similar to Mercer International Inc. (NASDAQ:MERC). These stocks are P.H. Glatfelter Company (NYSE:GLT), Boise Inc. (NYSE:BZ), Orchids Paper Products Company (NYSEAMEX:TIS), Wausau Paper Corp. (NYSE:WPP), and Neenah Paper, Inc. (NYSE:NP). This group of stocks are in the paper & paper products industry and their market caps resemble MERC’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| P.H. Glatfelter Company (NYSE:GLT) | 14 | 0 | 0 |
| Boise Inc. (NYSE:BZ) | 21 | 0 | 0 |
| Orchids Paper Products Company (NYSEAMEX:TIS) | 3 | 0 | 0 |
| Wausau Paper Corp. (NYSE:WPP) | 9 | 0 | 0 |
| Neenah Paper, Inc. (NYSE:NP) | 8 | 0 | 0 |
Using the returns shown by Insider Monkey’s strategies, regular investors should always keep one eye on hedge fund and insider trading sentiment, and Mercer International Inc. (NASDAQ:MERC) is an important part of this process.
