Investing 101: Stocks Reaching New Highs With Institutional Buying
Here we present a list of 10 stocks that have demonstrated bullish momentum and met the following requirements:
- Recently hit a new 52-week high
- Significant levels of net purchases from institutional investors over the current quarter
- Market cap over $300M
Before you dive into the list, take a moment to review the implications of these list requirements.
Momentum investing aims to capitalize on the continuance of existing trends and the strength behind it. The stocks on this list demonstrate momentum by reaching their 52-week high.
The 52-week high is the highest price paid for a share of the company in the last 52 weeks (one year).
Institutional investors are also known as "big money" investors or managers. They represent big pools of money such as investment banks, pension funds, mutual funds, hedge funds, endowment funds, etc. When they invest in stocks, they can invest hundreds of thousands of dollars or more at one time. These transactions, called "block trades," can have a significant effect on share prices.
Because institutional investors handle such large amounts of money, it is easy enough to assume that the big money managers know what they are doing -- or at the very least, know more than the average investor. This is why these investors are also sometimes referred to as "smart money."
If institutional investors start investing in a company, regular investors can assume that some of the most talented analysts and money managers expect the company's share prices to increase over time. The stocks on our list are experiencing significant investment from big money.
Market capitalization (market cap): Market capitalization, commonly referred to as market cap, is the total market value of a company's outstanding shares. It can be thought of as a measure of company's size. It can be calculated by multiplying the number of shares by the current price of the shares. Companies with higher market cap are considered to have more trustworthy information because they have greater histories of profitability and data.
Hedge funds seem to think these names have more upside to price in. Do you agree? (Click here to access free, interactive tools to analyze these ideas.)
1. El Paso Pipeline Partners (NYS: EPB) : Engages in the ownership and operation of natural gas transportation pipelines and storage assets in the United States. Net institutional purchases in the current quarter at 9.9M shares, which represents about 8.46% of the company's float of 116.97M shares.
2. Equity LifeStyle Properties (NYS: ELS) : A publicly owned real estate investment trust. Net institutional purchases in the current quarter at 6.4M shares, which represents about 17.78% of the company's float of 36.00M shares.
3. Athenahealth (NAS: ATHN) : Provides ongoing billing, clinical-related, and other related services to medical group practices primarily in the United States. Net institutional purchases in the current quarter at 1.6M shares, which represents about 4.68% of the company's float of 34.18M shares.
4. PriceSmart (NAS: PSMT) : Operates warehouse clubs in the United States, Latin America, and the Caribbean. Net institutional purchases in the current quarter at 1.6M shares, which represents about 8.39% of the company's float of 19.08M shares.
5. CVR Partners (NYS: UAN) : Engages in the production of nitrogen fertilizers including ammonia and urea ammonium nitrate. Net institutional purchases in the current quarter at 10.0M shares, which represents about 13.77% of the company's float of 72.62M shares.
6. Oxford Industries (NYS: OXM) : Engages in designing, sourcing, and marketing apparel products primarily in the United States and the United Kingdom. Net institutional purchases in the current quarter at 1.1M shares, which represents about 7.96% of the company's float of 13.82M shares.
7. Merge Healthcare (NAS: MRGE) : Provides health information technology interoperability solutions. Net institutional purchases in the current quarter at 2.8M shares, which represents about 13.33% of the company's float of 21.00M shares.
8. Endologix (NAS: ELGX) : Develops, manufactures, markets, and sells minimally invasive treatments for aortic disorders. Net institutional purchases in the current quarter at 5.1M shares, which represents about 10.26% of the company's float of 49.72M shares.
9. Caliper Life Sciences (NAS: CALP) : Develops and sells life sciences products and services primarily to pharmaceutical, biotechnology, and diagnostics companies, and government and other not-for-profit research institutions in the United States, Europe, and Asia. Net institutional purchases in the current quarter at 2.4M shares, which represents about 5.01% of the company's float of 47.89M shares.
10. Hi Tech Pharmacal (NAS: HITK) : Develops, manufactures, markets, and sells generic, prescription, over-the-counter (OTC), and nutritional products in liquid and semisolid dosage forms in the United States. Net institutional purchases in the current quarter at 632.6K shares, which represents about 6.24% of the company's float of 10.13M shares.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Becca Lipman and Eben Esterhuizen does not own any of the shares mentioned above. Institutional data sourced from Fidelity.
At the time this article was published The Motley Fool owns shares of Oxford Industries. Motley Fool newsletter services have recommended buying shares of El Paso Pipeline Partners. 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. The Motley Fool has a disclosure policy.
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