Is Spartech Corporation (NYSE:SEH) an exceptional stock to buy now? Investors who are in the know are becoming less confident. The number of bullish hedge fund bets stayed the same which is a slightly negative development in our experience
In today’s marketplace, there are dozens of gauges investors can use to watch Mr. Market. Two of the most useful are hedge fund and insider trading movement. At Insider Monkey, our studies have shown that, historically, those who follow the best picks of the best hedge fund managers can outclass the market by a significant margin (see just how much).
Equally as important, bullish insider trading sentiment is another way to parse down the investments you’re interested in. There are a number of motivations for a corporate insider to drop shares of his or her company, but just one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the useful potential of this method if piggybackers know what to do (learn more here).
With these “truths” under our belt, let’s take a gander at the recent action regarding Spartech Corporation (NYSE:SEH).
How have hedgies been trading Spartech Corporation (NYSE:SEH)?
At the end of the fourth quarter, a total of 9 of the hedge funds we track held long positions in this stock, a change of 0% from the third quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes meaningfully.
According to our comprehensive database, AQR Capital Management, managed by Cliff Asness, holds the most valuable 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 Jane Mendillo of Harvard Management Co, with a $13.3 million position; 1.3% of its 13F portfolio is allocated to the stock. Some other hedgies that are bullish include Paul Glazer’s Glazer Capital, Chuck Royce’s Royce & Associates and D. E. Shaw’s D E Shaw.
Because Spartech Corporation (NYSE:SEH) has witnessed declining sentiment from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of hedgies that slashed their full holdings in Q4. At the top of the heap, Stuart Peterson’s Artis Capital Management cut the biggest investment of the 450+ funds we key on, totaling about $0.3 million in stock., and Israel Englander of Millennium Management was right behind this move, as the fund cut about $0.3 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
How have insiders been trading Spartech Corporation (NYSE:SEH)?
Insider trading activity, especially when it’s bullish, is best served when the company in question has seen transactions within the past 180 days. Over the latest six-month time frame, Spartech Corporation (NYSE:SEH) has seen zero unique insiders purchasing, and 5 insider sales (see the details of insider trades here).
Let’s also examine 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). All of these stocks are in 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||6|
With the returns exhibited by the aforementioned research, everyday investors should always pay attention to hedge fund and insider trading sentiment, and Spartech Corporation (NYSE:SEH) is no exception.