Spartech Corporation (SEH): Insiders Are Dumping, Should You?: Tredegar Corporation (TG), Rogers Corporation (ROG)

Spartech Corporation (NYSE:SEH) was in 9 hedge funds’ portfolio at the end of the fourth quarter of 2012. SEH shareholders have witnessed a decrease in hedge fund sentiment lately. There were 9 hedge funds in our database with SEH holdings at the end of the previous quarter.

AQR CAPITAL MANAGEMENT

At the moment, there are plenty of indicators market participants can use to watch the equity markets. A duo of the most innovative 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 top money managers can trounce their index-focused peers by a significant margin (see just how much).

Just as integral, positive insider trading activity is a second way to parse down the investments you’re interested in. There are plenty of motivations for a corporate insider to get rid of shares of his or her company, but just one, very obvious reason why they would behave bullishly. Plenty of academic studies have demonstrated the valuable potential of this tactic if “monkeys” understand what to do (learn more here).

Keeping this in mind, let’s take a gander at the recent action regarding Spartech Corporation (NYSE:SEH).

What have hedge funds been doing with Spartech Corporation (NYSE:SEH)?

At year’s end, a total of 9 of the hedge funds we track were bullish in this stock, a change of 0% from the third quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes meaningfully.

Of the funds we track, AQR Capital Management, managed by Cliff Asness, holds the largest position in Spartech Corporation (NYSE:SEH). AQR Capital Management has a $18 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Harvard Management Co, managed by Jane Mendillo, which held a $13 million position; the fund has 1.3% of its 13F portfolio invested in the stock. Remaining hedgies that hold long positions include Paul Glazer’s Glazer Capital, Chuck Royce’s Royce & Associates and D. E. Shaw’s D E Shaw.

Due to the fact that Spartech Corporation (NYSE:SEH) has witnessed falling interest from the entirety of the hedge funds we track, it’s easy to see that there is a sect of funds who sold off their positions entirely heading into 2013. Intriguingly, Stuart Peterson’s Artis Capital Management cut the biggest investment of the 450+ funds we monitor, valued at close to $0 million in stock., and Israel Englander of Millennium Management was right behind this move, as the fund said goodbye to about $0 million worth. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

How have insiders been trading Spartech Corporation (NYSE:SEH)?

Insider buying is at its handiest when the company in question has seen transactions within the past 180 days. Over the last six-month time frame, Spartech Corporation (NYSE:SEH) has experienced zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).

Let’s go over hedge fund and insider activity in other stocks similar to Spartech Corporation (NYSE:SEH). These stocks are Tredegar Corporation (NYSE:TG), Rogers Corporation (NYSE:ROG), China XD Plastics Co Ltd (NASDAQ:CXDC), Myers Industries, Inc. (NYSE:MYE), and AEP Industries (NASDAQ:AEPI). This group of stocks are the members of the rubber & plastics industry and their market caps are closest to SEH’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Tredegar Corporation (NYSE:TG) 6 0 4
Rogers Corporation (NYSE:ROG) 10 2 9
China XD Plastics Co Ltd (NASDAQ:CXDC) 6 0 0
Myers Industries, Inc. (NYSE:MYE) 6 1 1
AEP Industries (NASDAQ:AEPI) 8 0 9

With the returns demonstrated by our research, everyday investors must always pay attention to hedge fund and insider trading sentiment, and Spartech Corporation (NYSE:SEH) is no exception.

Click here to learn why you should track hedge funds

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