Is MeadWestvaco Corp. (MWV) Going to Burn These Hedge Funds?

Is MeadWestvaco Corp. (NYSE:MWV) undervalued? Hedge funds are becoming hopeful. The number of bullish hedge fund positions advanced by 1 recently.

In the 21st century investor’s toolkit, there are tons of gauges investors can use to analyze Mr. Market. A duo of the best are hedge fund and insider trading movement. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the elite investment managers can outperform the broader indices by a superb amount (see just how much).

Equally as important, positive insider trading activity is a second way to break down the financial markets. Just as you’d expect, there are many incentives for an insider to sell shares of his or her company, but just one, very clear reason why they would buy. Various empirical studies have demonstrated the valuable potential of this strategy if “monkeys” know where to look (learn more here).

With all of this in mind, we’re going to take a peek at the key action surrounding MeadWestvaco Corp. (NYSE:MWV).

How are hedge funds trading MeadWestvaco Corp. (NYSE:MWV)?

Heading into Q2, a total of 20 of the hedge funds we track held long positions in this stock, a change of 5% from one quarter earlier. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes considerably.

Of the funds we track, Soros Fund Management, managed by George Soros, holds the biggest position in MeadWestvaco Corp. (NYSE:MWV). Soros Fund Management has a $66.4 million position in the stock, comprising 0.8% of its 13F portfolio. Sitting at the No. 2 spot is SAC Capital Advisors, managed by Steven Cohen, which held a $36.6 million position; 0.2% of its 13F portfolio is allocated to the stock. Remaining hedgies with similar optimism include Israel Englander’s Millennium Management, Alexander Mitchell’s Scopus Asset Management and Paul Tudor Jones’s Tudor Investment Corp.

With a general bullishness amongst the heavyweights, specific money managers were breaking ground themselves. Soros Fund Management, managed by George Soros, established the biggest position in MeadWestvaco Corp. (NYSE:MWV). Soros Fund Management had 66.4 million invested in the company at the end of the quarter. Alexander Mitchell’s Scopus Asset Management also made a $19.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Clint Carlson’s Carlson Capital, Israel Englander’s Millennium Management, and Israel Englander’s Catapult Capital Management.

What have insiders been doing with MeadWestvaco Corp. (NYSE:MWV)?

Insider purchases made by high-level executives is most useful when the company we’re looking at has seen transactions within the past six months. Over the last 180-day time period, MeadWestvaco Corp. (NYSE:MWV) has experienced zero unique insiders purchasing, and 1 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to MeadWestvaco Corp. (NYSE:MWV). These stocks are Tupperware Brands Corporation (NYSE:TUP), Sealed Air Corp (NYSE:SEE), Ball Corporation (NYSE:BLL), Crown Holdings, Inc. (NYSE:CCK), and Rock-Tenn Company (NYSE:RKT). This group of stocks belong to the packaging & containers industry and their market caps are similar to MWV’s market cap.

With the returns demonstrated by the aforementioned research, everyday investors should always keep an eye on hedge fund and insider trading activity, and MeadWestvaco Corp. (NYSE:MWV) applies perfectly to this mantra.

Click here to learn why you should track hedge funds