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Do you like to follow the buying trends of the 'Smart Money' investors? These investors, including hedge fund managers and mutual fund managers, are thought to have the experience and knowledge to make good trades. We ran a screen with this in mind.

We screened for stocks currently trading between $1- $5 a share that are also rallying above their 200-day moving average. We then screened for those with the most significant net institutional purchases over the current quarter, indicating that institutional investors such as hedge fund managers expect these stocks to continue to outperform.

We thought this would be a good start to finding investment ideas that might have been ignored due to its recent rally.

Interactive Chart: Press Play to compare changes in market cap over the last two years for the 3 stocks mentioned below.

Do you think hedge funds are calling it right on these names? Use this list as a starting point for your own analysis.

1. Clearwire Corporation (CLWR): Provides wireless broadband services. Market cap at $4.22B, most recent closing price at $2.89. The stock is currently rallying 66.59% above its 200-day moving average. Net institutional purchases in the current quarter at 43.9M shares, which represents about 9.72% of the company's float of 451.64M shares.

2. Pendrell Corporation (NASDAQ:PCO): Through its wholly-owned subsidiary, Pendrell Technologies, Inc. provides corporate intellectual property solutions and litigation insights to Fortune 500 companies and technology firms worldwide. Market cap at $338.78M, most recent closing price at $1.28. The stock is currently rallying 0.35% above its 200-day moving average. Net institutional purchases in the current quarter at 36.2M shares, which represents about 25.41% of the company's float of 142.45M shares.

3. Power-One Inc. (NASDAQ:PWER): Designs, manufactures, and markets power conversion and power management solutions for the renewable energy (RE), communications infrastructure, and other technology markets. Market cap at $551.43M, most recent closing price at $4.61. The stock is currently rallying 1.26% above its 200-day moving average. Net institutional purchases in the current quarter at 8.8M shares, which represents about 8.73% of the company's float of 100.84M shares.

Source: 3 Rallying Hedge Fund Picks Trading Under $5