Stillwater Mining Company (NYSE:SWC): Are Hedge Funds Right About This Stock?

Is Stillwater Mining Company (NYSE:SWC) ready to raly soon? Investors who are in the know are becoming hopeful. The number of long hedge fund positions inched up by 1 lately.

Stillwater Mining Company (NYSE:SWC)

In the eyes of most market participants, hedge funds are perceived as unimportant, old investment tools of the past. While there are more than 8000 funds trading today, we at Insider Monkey look at the bigwigs of this group, around 450 funds. It is widely believed that this group controls the lion’s share of the smart money’s total asset base, and by keeping an eye on their best picks, we have brought to light a number of investment strategies that have historically outpaced the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 25 percentage points in 6.5 month (check out a sample of our picks).

Equally as beneficial, positive insider trading activity is a second way to parse down the world of equities. There are plenty of stimuli for an executive to get rid of shares of his or her company, but only one, very clear reason why they would buy. Plenty of academic studies have demonstrated the impressive potential of this strategy if you know what to do (learn more here).

With all of this in mind, we’re going to take a peek at the key action encompassing Stillwater Mining Company (NYSE:SWC).

How are hedge funds trading Stillwater Mining Company (NYSE:SWC)?

Heading into 2013, a total of 17 of the hedge funds we track were bullish in this stock, a change of 6% from the third quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their stakes meaningfully.

Of the funds we track, Kerr Neilson’s Platinum Asset Management had the biggest position in Stillwater Mining Company (NYSE:SWC), worth close to $202 million, comprising 4.5% of its total 13F portfolio. Sitting at the No. 2 spot is Carlson Capital, managed by Clint Carlson, which held a $69 million position; the fund has 1.1% of its 13F portfolio invested in the stock. Other hedgies with similar optimism include Ken Fisher’s Fisher Asset Management, Peter Franklin Palmedo’s Sun Valley Gold and Michael Kaufman’s MAK Capital One.

As aggregate interest increased, key money managers have jumped into Stillwater Mining Company (NYSE:SWC) headfirst. CR Intrinsic Investors, managed by SAC Subsidiary, initiated the biggest position in Stillwater Mining Company (NYSE:SWC). CR Intrinsic Investors had 4 million invested in the company at the end of the quarter. Philip Hempleman’s Ardsley Partners also made a $1 million investment in the stock during the quarter. The following funds were also among the new SWC investors: Paul Tudor Jones’s Tudor Investment Corp and Glenn Russell Dubin’s Highbridge Capital Management.

How are insiders trading Stillwater Mining Company (NYSE:SWC)?

Insider trading activity, especially when it’s bullish, is particularly usable when the company in focus has seen transactions within the past half-year. Over the latest half-year time period, Stillwater Mining Company (NYSE:SWC) has seen 1 unique insiders purchasing, and 4 insider sales (see the details of insider trades here).

With the returns exhibited by our research, retail investors should always pay attention to hedge fund and insider trading activity, and Stillwater Mining Company (NYSE:SWC) is an important part of this process.

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Insider Monkey’s small-cap strategy returned 29.2% between September 2012 and February 2013 versus 8.7% for the S&P 500 index. Try it now by clicking the link above.

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