Earnings season is in full swing, and this week is seeing a lot of the action. Over 500 companies are reporting in the week, including big names such as ExxonMobil, Amazon, Eli Lilly, and Qualcomm.
When companies report their quarterly earnings, it is usually a big mover for stock prices. Whenever there is a mismatch between expectations and the actual performance, stocks will usually price in the difference immediately.
For ideas on how to create your own watchlist this earnings season, we ran a screen on this week's reporting companies. We screened these stocks for those with the greatest buying attention from the "smart money," i.e., institutional investors and company insiders.
Institutional investors like hedge fund managers and mutual fund managers have a lot of experience and access to sophisticated research, so when they report buying shares of a company, investors and analysts pay attention.
In the same way, when company insiders, such as members of the board and upper management, report that they buy company shares, it is viewed very positively by the market, because who knows their company better than they do?
Business section: Investing ideas
Below is the final list of stocks from our screen on this week's reporting companies. These stocks have seen significant net institutional purchases over the current quarter as a percent of share float, as well as significant net insider purchases over the last six months, also expressed in terms of share float.
Do you think the smart money is calling it right on these names? Will they report positive earnings surprises this week?
List sorted by net insider purchases as a percent of share float. (Click here to access free, interactive tools to analyze these ideas.)
1. Infinera (NAS: INFN) : Provides optical networking systems based on photonic integration technology in the United States. Market cap of $791.39M. Earnings to be announced on Feb 2. Net insider shares purchased over the last six months at 200K, which is 0.19% of the company's 103.23M share float. Net institutional shares purchased over the current quarter at 5.5M, which is 5.33% of the company's 103.23M share float.
2. Niska Gas Storage Partners (NYS: NKA) : Operates natural gas storage assets in North America. Market cap of $739.69M. Earnings to be announced on Feb 2. Net insider shares purchased over the last six months at 24.90K, which is 0.14% of the company's 17.45M share float. Net institutional shares purchased over the current quarter at 883.1K, which is 5.06% of the company's 17.45M share float.
3. Affymetrix (NAS: AFFX) : Engages in the development, manufacture, sale, and servicing of consumables and systems for genetic analysis in the life sciences and clinical health care markets. Market cap of $328.39M. Earnings to be announced on Feb 2. Net insider shares purchased over the last six months at 65.0K, which is 0.12% of the company's 56.19M share float. Net institutional shares purchased over the current quarter at 3.6M, which is 6.41% of the company's 56.19M share float.
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 Alexander Crawford does not own any of the shares mentioned above. Insider data sourced from Yahoo Finance, institutional data from Fidelity, all other data from Finviz.
At the time thisarticle was published The Motley Fool owns shares of Amazon.com, QUALCOMM, and Infinera. Motley Fool newsletter services have recommended buying shares of Infinera and Amazon.com. 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.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.