Institutional investors are commonly referred to as the “smart money” because they tend to have more knowledge about companies and spend more time analyzing them than most investors. For this reason, analysts use institutional buying and selling data as one way to gauge the sentiment surrounding a stock.
We began by screening for technically oversold stocks [with RSI(14) below 40] that are trading near their 52-week lows. Among these, we screened for those that have also been highly bought by institutional investors over the current quarter.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.
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We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.
Do you think institutional investors got it wrong on these names, or are these opportunities to buy in? Use this list as a starting-off point for your own analysis.
List sorted by net institutional purchases as a percent of share float.
1. Sterling Financial Corp. (STSA): Savings & Loans Industry. Market cap of $996.0M. Net institutional purchases over the current quarter at 2.2M shares, representing 15.46% of the company's 14.23M share float. RSI(14) at 35.12. The stock is trading 6.56% above its 52-week low. This is a risky stock that is significantly more volatile than the overall market (beta = 2.23). The stock has lost 72.28% over the last year.
2. Nektar Therapeutics (NKTR): Biotechnology Industry. Market cap of $857.88M. Net institutional purchases over the current quarter at 15.6M shares, representing 15.01% of the company's 103.90M share float. RSI(14) at 35.89. The stock is trading 4.52% above its 52-week low. The stock is a short squeeze candidate, with a short float at 10.29% (equivalent to 11.52 days of average volume). The stock has lost 41.93% over the last year.
3. SemGroup Corporation (SEMG): Oil & Gas Pipelines Industry. Market cap of $1.03B. Net institutional purchases over the current quarter at 5.4M shares, representing 13.10% of the company's 41.23M share float. RSI(14) at 32.92. The stock is trading 8.28% above its 52-week low. The stock is currently stuck in a downtrend, trading -5.11% below its SMA20, -5.75% below its SMA50, and -10.19% below its SMA200.
4. SK Telecom Co. Ltd. (SKM): Wireless Communications Industry. Market cap of $10.40B. Net institutional purchases over the current quarter at 6.6M shares, representing 12.69% of the company's 52.01M share float. RSI(14) at 24.92. The stock is trading 5.79% above its 52-week low. The stock offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 4.89%, current ratio at 1.43, and quick ratio at 1.41. It's been a rough couple of days for the stock, losing 14.6% over the last week.
5. Yingli Green Energy Holding Co. Ltd. (YGE): Semiconductor Circuits Industry. Market cap of $1.24B. Net institutional purchases over the current quarter at 10.2M shares, representing 11.41% of the company's 89.36M share float. RSI(14) at 33.36. The stock is trading 3.09% above its 52-week low. This is a risky stock that is significantly more volatile than the overall market (beta = 2.99). The stock is a short squeeze candidate, with a short float at 16.81% (equivalent to 5.06 days of average volume). It's been a rough couple of days for the stock, losing 14.01% over the last week.
6. LPL Investment Holdings Inc. (LPLA): Investment Brokerage Industry. Market cap of $3.69B. Net institutional purchases over the current quarter at 3.1M shares, representing 8.61% of the company's 35.99M share float. RSI(14) at 37.98. The stock is trading 5.92% above its 52-week low.
7. USEC Inc. (USU): Industrial Metals & Minerals Industry. Market cap of $398.65M. Net institutional purchases over the current quarter at 9.5M shares, representing 8.53% of the company's 111.43M share float. RSI(14) at 39.62. The stock is trading 7.07% above its 52-week low. The stock is a short squeeze candidate, with a short float at 20.35% (equivalent to 11.95 days of average volume). The stock has lost 37.71% over the last year.
8. AbitibiBowater Inc. Common Stoc (ABH): Paper & Paper Products Industry. Market cap of $2.04B. Net institutional purchases over the current quarter at 6.1M shares, representing 7.41% of the company's 82.31M share float. RSI(14) at 33.72. The stock is trading 5.98% above its 52-week low. The stock is a short squeeze candidate, with a short float at 8.17% (equivalent to 9.74 days of average volume).
9. Regal Entertainment Group (RGC): Movie Production, Theaters Industry. Market cap of $1.81B. Net institutional purchases over the current quarter at 6.2M shares, representing 7.20% of the company's 86.07M share float. RSI(14) at 36. The stock is trading 4.17% above its 52-week low. The stock is a short squeeze candidate, with a short float at 15.54% (equivalent to 10.03 days of average volume). The stock has lost 9.06% over the last year.
10. Quad/Graphics, Inc. (QUAD): Business Services Industry. Market cap of $1.79B. Net institutional purchases over the current quarter at 1.3M shares, representing 5.83% of the company's 22.28M share float. RSI(14) at 31.94. The stock is trading 2.57% above its 52-week low. The stock has lost 19.29% over the last year.
11. KB Home (KBH): Residential Construction Industry. Market cap of $859.37M. Net institutional purchases over the current quarter at 3.5M shares, representing 5.35% of the company's 65.39M share float. RSI(14) at 32.8. The stock is trading 2.70% above its 52-week low. The stock has lost 12.31% over the last year.
12. MEMC Electronic Materials Inc. (WFR): Semiconductor Industry. Market cap of $1.85B. Net institutional purchases over the current quarter at 11.0M shares, representing 4.79% of the company's 229.88M share float. RSI(14) at 31.58. The stock is trading 0.63% above its 52-week low. It's been a rough couple of days for the stock, losing 5.74% over the last week.
13. Ixia (XXIA): Semiconductor Equipment & Materials Industry. Market cap of $680.13M. Net institutional purchases over the current quarter at 2.2M shares, representing 4.22% of the company's 52.11M share float. RSI(14) at 18.38. The stock is trading 5.95% above its 52-week low. The stock is a short squeeze candidate, with a short float at 7.83% (equivalent to 7.41 days of average volume). It's been a rough couple of days for the stock, losing 22.66% over the last week.
14. BancorpSouth, Inc. (BXS): Regional Banks Industry. Market cap of $1.0B. Net institutional purchases over the current quarter at 2.9M shares, representing 4.02% of the company's 72.18M share float. RSI(14) at 37.72. The stock is trading 2.68% above its 52-week low. The stock is a short squeeze candidate, with a short float at 8.6% (equivalent to 6.47 days of average volume). The stock has lost 31.68% over the last year.
*Institutional data sourced from Fidelity, all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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