Hedge Funds Are Selling Xerium Technologies, Inc. (XRM)

Xerium Technologies, Inc. (NYSE:XRM) shareholders have witnessed a decrease in support from the world’s most elite money managers lately.

According to most investors, hedge funds are assumed to be slow, outdated investment vehicles of yesteryear. While there are over 8000 funds in operation at present, we at Insider Monkey hone in on the moguls of this club, around 450 funds. Most estimates calculate that this group oversees most of the smart money’s total asset base, and by monitoring their top stock picks, we have figured out a number of investment strategies that have historically outstripped the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (check out a sample of our picks).

Just as key, positive insider trading sentiment is another way to parse down the financial markets. As the old adage goes: there are lots of stimuli for a corporate insider to drop shares of his or her company, but only one, very obvious reason why they would buy. Several empirical studies have demonstrated the impressive potential of this method if piggybackers know what to do (learn more here).

Consequently, we’re going to take a peek at the key action regarding Xerium Technologies, Inc. (NYSE:XRM).

How are hedge funds trading Xerium Technologies, Inc. (NYSE:XRM)?

At the end of the first quarter, a total of 7 of the hedge funds we track held long positions in this stock, a change of -13% from the previous quarter. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were upping their holdings substantially.

Of the funds we track, Eric Edidin and Josh Lobel’s Archer Capital Management had the biggest position in Xerium Technologies, Inc. (NYSE:XRM), worth close to $3.3 million, accounting for 0.6% of its total 13F portfolio. Coming in second is Silver Point Capital, managed by Edward A. Mule, which held a $1 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedge funds with similar optimism include Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, Jay Petschek and Steven Major’s Corsair Capital Management and Jim Simons’s Renaissance Technologies.

Seeing as Xerium Technologies, Inc. (NYSE:XRM) has experienced falling interest from the smart money, we can see that there were a few money managers who sold off their full holdings heading into Q2. Intriguingly, Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management cut the biggest position of the 450+ funds we key on, comprising about $1.3 million in stock., and Michael M. Rothenberg and David Sackler of Moab Capital Partners was right behind this move, as the fund dropped about $0.6 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 1 funds heading into Q2.

What have insiders been doing with Xerium Technologies, Inc. (NYSE:XRM)?

Insider purchases made by high-level executives is at its handiest when the company in question has seen transactions within the past six months. Over the latest half-year time frame, Xerium Technologies, Inc. (NYSE:XRM) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Xerium Technologies, Inc. (NYSE:XRM). These stocks are Mercer International Inc. (NASDAQ:MERC), Tufco Technologies, Inc. (NASDAQ:TFCO), Orient Paper Inc (NYSEAMEX:ONP), Orchids Paper Products Company (NYSEAMEX:TIS), and Verso Paper Corp. (NYSE:VRS). This group of stocks belong to the paper & paper products industry and their market caps are closest to XRM’s market cap.