Do you take trading signals from smart money buying and selling trends? For a closer look at stocks currently rejected by smart money institutional investors, we ran a screen.
We began by screening the semiconductors industry for stocks that appear undervalued relative to earnings growth, with PEG below 1. Perhaps they appear undervalued for a reason...
We screened these names for those with bearish sentiment from institutional investors, with significant net institutional sales over the last quarter representing at least 5% of share float. This indicates that institutional investors such as hedge fund managers and mutual fund managers expect these names to underperform.
Tool provided by Kapitall.com
Do you think these names will drop like the smart money expects? Use this list as a starting point for your own analysis.
1. Mellanox Technologies, Ltd. (NASDAQ:MLNX): Engages in the design, development, marketing, and sale of interconnect products primarily in North America, Israel, Europe, and Asia. Market cap at $3.28B, most recent closing price at $78.85. Net institutional sales in the current quarter at -3.2M shares, which represents about 8.79% of the company's float of 36.39M shares.
2. Spreadtrum Communications Inc. (NASDAQ:SPRD): Operates as a fabless semiconductor company that designs, develops, and markets baseband processor and RF transceiver solutions for wireless communications and mobile television markets. Market cap at $795.91M, most recent closing price at $17.34. Net institutional sales in the current quarter at -2.3M shares, which represents about 6.97% of the company's float of 33.00M shares.
3. Volterra Semiconductor Corporation (NASDAQ:VLTR): Engages in the design, development, and marketing of analog and mixed-signal power management semiconductors for the computing, storage, networking, and consumer markets. Market cap at $412.32M, most recent closing price at $16.46. Net institutional sales in the current quarter at -3.2M shares, which represents about 13.09% of the company's float of 24.45M shares.
4. MagnaChip Semiconductor Corporation (NYSE:MX): Designs and manufactures analog and mixed-signal semiconductor products for high-volume consumer applications. Market cap at $426.85M, most recent closing price at $11.87. Net institutional sales in the current quarter at -1.8M shares, which represents about 10.2% of the company's float of 17.65M shares.
*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.
Business relationship disclosure: Kapitall is a team of analysts. This article was written by Sabina Bhatia, one of our writers. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.