Is Schweitzer-Mauduit International, Inc. (SWM) Going to Burn These Hedge Funds?

Is it smart to be bullish on Schweitzer-Mauduit International, Inc. (NYSE:SWM)?

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Equally as key, bullish insider trading sentiment is another way to look at the stock market universe. As the old adage goes: there are plenty of motivations for an executive to drop shares of his or her company, but just one, very obvious reason why they would initiate a purchase. Many academic studies have demonstrated the impressive potential of this method if investors know what to do (learn more here).

Furthermore, we’re going to analyze the newest info surrounding Schweitzer-Mauduit International, Inc. (NYSE:SWM).

What have hedge funds been doing with Schweitzer-Mauduit International, Inc. (NYSE:SWM)?

At Q2’s end, a total of 12 of the hedge funds we track were bullish in this stock, a change of -14% from the previous quarter. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings meaningfully.

When using filings from the hedgies we track, Chuck Royce’s Royce & Associates had the most valuable position in Schweitzer-Mauduit International, Inc. (NYSE:SWM), worth close to $113.2 million, comprising 0.3% of its total 13F portfolio. Coming in second is Renaissance Technologies, managed by Jim Simons, which held a $24.4 million position; 0.1% of its 13F portfolio is allocated to the company. Some other peers with similar optimism include Paul Marshall and Ian Wace’s Marshall Wace LLP, Joel Greenblatt’s Gotham Asset Management and Andy Redleaf’s Whitebox Advisors.

Since Schweitzer-Mauduit International, Inc. (NYSE:SWM) has witnessed declining interest from the smart money’s best and brightest, it’s safe to say that there lies a certain “tier” of hedge funds that decided to sell off their entire stakes at the end of the second quarter. At the top of the heap, Andrew R. Midler’s Savitr Capital dumped the largest investment of the 450+ funds we track, worth an estimated $3.5 million in stock, and David Costen Haley of HBK Investments was right behind this move, as the fund dumped about $0.8 million worth. These transactions are interesting, as total hedge fund interest dropped by 2 funds at the end of the second quarter.

Insider trading activity in Schweitzer-Mauduit International, Inc. (NYSE:SWM)

Legal insider trading, particularly when it’s bullish, is most useful when the company we’re looking at has experienced transactions within the past 180 days. Over the last six-month time frame, Schweitzer-Mauduit International, Inc. (NYSE:SWM) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll check out the relationship between both of these indicators in other stocks similar to Schweitzer-Mauduit International, Inc. (NYSE:SWM). These stocks are Resolute Forest Products Inc (NYSE:RFP), P.H. Glatfelter Company (NYSE:GLT), KapStone Paper and Packaging Corp. (NYSE:KS), Buckeye Technologies Inc. (NYSE:BKI), and Clearwater Paper Corp (NYSE:CLW). This group of stocks are the members of the paper & paper products industry and their market caps match SWM’s market cap.

Using the results explained by Insider Monkey’s studies, average investors must always watch hedge fund and insider trading activity, and Schweitzer-Mauduit International, Inc. (NYSE:SWM) applies perfectly to this mantra.

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