Schweitzer-Mauduit Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of paper and tobacco products company Schweitzer-Mauduit (NYSE: SWM  ) fell as much as 18% on huge volume in intraday trading today.

So what: Why the swooning stock price? There's no news out on the company, so it's unlikely that it's fundamental issues. Schweitzer-Mauduit's stock, however, has a very low average trading volume, so if there are any larger institutional investors looking to reduce or eliminate their positions, it could create significant selling pressure.

Now what: Schweitzer-Mauduit's primary business is tobacco. Roughly 90% of its sales come from tobacco products, and the company counts Philip Morris International (NYSE: PM  ) , Altria (NYSE: MO  ) , and British American Tobacco (NYSE: BTI  ) among its top customers. While today's selling pressure may give current shareholders a sinking feeling in their stomachs, savvy investors will keep their focus on the company's fundamentals and the intrinsic value of the business rather than the movements in the stock price.

Want to keep up to date on Schweitzer-Mauduit? Add it to your watchlist.

Philip Morris International is a Motley Fool Global Gains pick. The Fool owns shares of Altria Group and Philip Morris International. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.                                                                      

Fool contributor Matt Koppenheffer owns shares of Philip Morris International, but does not own shares of any of the other companies mentioned. You can check out what Matt is keeping an eye on by visiting his Motley Fool CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool's disclosure policy assures you no Wookiees were harmed in the making of this article.


Read/Post Comments (3) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 03, 2010, at 4:14 PM, Woland55555 wrote:

    You are a fundamental moron mr.Koppenheffer.

  • Report this Comment On December 03, 2010, at 7:52 PM, TMFKopp wrote:

    @Woland

    That a hilarious (if utterly useless) comment! Thanks for the laugh!

    Matt

  • Report this Comment On December 03, 2010, at 10:54 PM, Woland55555 wrote:

    Matt,

    Even in tobacco business, there is no smoke without fire.

    It's funny that this article pop's out when I searched for some info on why the stock dropped 11% in one day.

    Woland.

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