Here is What Hedge Funds Think About Mercer International Inc. (MERC)

Mercer International Inc. (NASDAQ:MERC) was in 11 hedge funds’ portfolio at the end of the first quarter of 2013. MERC investors should pay attention to a decrease in hedge fund interest of late. There were 13 hedge funds in our database with MERC holdings at the end of the previous quarter.

In the 21st century investor’s toolkit, there are a multitude of gauges market participants can use to monitor Mr. Market. A pair of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best hedge fund managers can trounce the broader indices by a solid margin (see just how much).

Equally as beneficial, positive insider trading activity is another way to parse down the investments you’re interested in. There are plenty of stimuli for a corporate insider to cut shares of his or her company, but just one, very obvious reason why they would buy. Plenty of empirical studies have demonstrated the useful potential of this tactic if shareholders know where to look (learn more here).

Now, let’s take a peek at the latest action surrounding Mercer International Inc. (NASDAQ:MERC).

What have hedge funds been doing with Mercer International Inc. (NASDAQ:MERC)?

In preparation for this quarter, a total of 11 of the hedge funds we track were bullish in this stock, a change of -15% from one quarter earlier. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their stakes significantly.

According to our comprehensive database, Platinum Asset Management, managed by Kerr Neilson, holds the most valuable position in Mercer International Inc. (NASDAQ:MERC). Platinum Asset Management has a $53 million position in the stock, comprising 1.2% of its 13F portfolio. The second largest stake is held by Jeffrey Gates of Gates Capital Management, with a $39.9 million position; the fund has 2.1% of its 13F portfolio invested in the stock. Remaining hedge funds that hold long positions include Tom Wagner and Ara Cohen’s Knighthead Capital, Jonathan Kolatch’s Redwood Capital Management and Michael Johnston’s Steelhead Partners.

Seeing as Mercer International Inc. (NASDAQ:MERC) has faced falling interest from hedge fund managers, we can see that there was a specific group of fund managers that slashed their full holdings last quarter. At the top of the heap, John Fichthorn’s Dialectic Capital Management dumped the largest stake of the “upper crust” of funds we track, comprising an estimated $2.5 million in stock., and Israel Englander of Millennium Management was right behind this move, as the fund dumped about $0.9 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds last quarter.

What have insiders been doing with Mercer International Inc. (NASDAQ:MERC)?

Insider trading activity, especially when it’s bullish, is most useful when the primary stock in question has experienced transactions within the past half-year. Over the last 180-day time frame, Mercer International Inc. (NASDAQ:MERC) has experienced 1 unique insiders buying, and zero insider sales (see the details of insider trades here).

With the results shown by the aforementioned studies, retail investors should always monitor hedge fund and insider trading sentiment, and Mercer International Inc. (NASDAQ:MERC) is no exception.

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