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Looking to avoid value traps? A historically low share price may seem attractive to an investor who hasn't done their research, but we can protect ourselves by taking cues from the actions of institutional investors, who are known for their in-depth analysis. We ran a screen with this in mind.

In creating our screen, we began by looking for stocks with troubling accounting signs. While there are many ways to go about this, we chose to look for names with falling current ratios.

The higher the current ratio, the more capable the company is of covering its liabilities. Naturally, a falling current ratio is troubling. We screened for stocks with current ratios that have consistently dropped over three 12-month intervals and fallen below a ratio of 3.

Next, 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.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

The stocks listed below are signaling two bearish trends, but do you think these names will drop like short sellers and smart money expect? Use this list as a starting point for your own analysis.

1. Constant Contact, Inc. (NASDAQ:CTCT): Provides on-demand email marketing, social media marketing, event marketing, and online survey solutions primarily in the United States. Market cap at $424.81M, most recent closing price at $13.91. Net institutional sales in the current quarter at -2.2M shares, which represents about 7.39% of the company's float of 29.78M shares. Current Ratios decreased from 4.38 to 3.49 during the first time interval (12 months ending 2009-12-31 vs. 12 months ending 2008-12-31). For the second time interval, Current Ratios decreased from 3.49 to 3.31 (12 months ending 2010-12-31 vs. 12 months ending 2009-12-31). And for the final time interval, Current Ratios decreased from 3.31 to 3.08 (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31).

2. New Oriental Education & Technology Group (NYSE:EDU): Provides private educational services primarily in the People's Republic of China. Market cap at $740.74M, most recent closing price at $19.29. Net institutional sales in the current quarter at -25.7M shares, which represents about 20.46% of the company's float of 125.59M shares. Current Ratios decreased from 2.95 to 2.75 during the first time interval (12 months ending 2010-05-31 vs. 12 months ending 2009-05-31). For the second time interval, Current Ratios decreased from 2.75 to 2.34 (12 months ending 2011-05-31 vs. 12 months ending 2010-05-31). And for the final time interval, Current Ratios decreased from 2.34 to 2.04 (12 months ending 2012-05-31 vs. 12 months ending 2011-05-31).

3. Farmer Brothers Co. (NASDAQ:FARM): Engages in the manufacture, wholesale, and distribution of coffee, tea, and culinary products in the United States. Market cap at $234.37M, most recent closing price at $14.37. Net institutional sales in the current quarter at -638.3K shares, which represents about 54.09% of the company's float of 1.18M shares. Current Ratios decreased from 2.5 to 1.93 during the first time interval (12 months ending 2010-06-30 vs. 12 months ending 2009-06-30). For the second time interval, Current Ratios decreased from 1.93 to 1.52 (12 months ending 2011-06-30 vs. 12 months ending 2010-06-30). And for the final time interval, Current Ratios decreased from 1.52 to 1.47 (12 months ending 2012-06-30 vs. 12 months ending 2011-06-30).

4. Amicus Therapeutics, Inc. (NASDAQ:FOLD): Focuses on the discovery, development, and commercialization of orally-administered, small molecule drugs for the treatment of various human genetic diseases. Market cap at $131.74M, most recent closing price at $2.67. Net institutional sales in the current quarter at -1.6M shares, which represents about 6.47% of the company's float of 24.73M shares. Current Ratios decreased from 9.24 to 7.19 during the first time interval (12 months ending 2009-12-31 vs. 12 months ending 2008-12-31). For the second time interval, Current Ratios decreased from 7.19 to 6.76 (12 months ending 2010-12-31 vs. 12 months ending 2009-12-31). And for the final time interval, Current Ratios decreased from 6.76 to 3.46 (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31).

5. FirstService Corp. (NASDAQ:FSRV): Provides real estate related services to commercial, institutional, and residential customers in North America and internationally. Market cap at $808.74M, most recent closing price at $28.14. Net institutional sales in the current quarter at -1.3M shares, which represents about 5.17% of the company's float of 25.16M shares. Current Ratios decreased from 1.2 to 1.19 during the first time interval (12 months ending 2009-12-31 vs. 9 months ending 2008-12-31). For the second time interval, Current Ratios decreased from 1.19 to 1.02 (12 months ending 2010-12-31 vs. 12 months ending 2009-12-31). And for the final time interval, Current Ratios decreased from 1.02 to 0.76 (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31).

6. Meredith Corp. (NYSE:MDP): Engages in magazine publishing and related brand licensing, television broadcasting, integrated marketing, interactive media, and video production businesses in the United States. Market cap at $1.47B, most recent closing price at $33.12. Net institutional sales in the current quarter at -3.9M shares, which represents about 12.82% of the company's float of 30.42M shares. Current Ratios decreased from 0.97 to 0.87 during the first time interval (12 months ending 2010-06-30 vs. 12 months ending 2009-06-30). For the second time interval, Current Ratios decreased from 0.87 to 0.82 (12 months ending 2011-06-30 vs. 12 months ending 2010-06-30). And for the final time interval, Current Ratios decreased from 0.82 to 0.74 (12 months ending 2012-06-30 vs. 12 months ending 2011-06-30).

7. OM Group Inc. (NYSE:OMG): Develops, produces, and markets specialty chemicals, advanced materials, and electrochemical energy storage products worldwide. Market cap at $710.74M, most recent closing price at $21.95. Net institutional sales in the current quarter at -1.6M shares, which represents about 5.1% of the company's float of 31.36M shares. Current Ratios decreased from 4.99 to 4.46 during the first time interval (12 months ending 2009-12-31 vs. 12 months ending 2008-12-31). For the second time interval, Current Ratios decreased from 4.46 to 3.53 (12 months ending 2010-12-31 vs. 12 months ending 2009-12-31). And for the final time interval, Current Ratios decreased from 3.53 to 2.92 (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31).

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.

Source: Money Managers Are Selling These 7 Illiquid Stocks