Do you consider the buying trends of "smart money" investors when comparing stocks? We ran a screen with this idea in mind.
We began by screening for stocks with high growth projections, with 5-year projected EPS growth rates above 15% that are also trading between $1 and $5 a share and market caps above $300 million.
Why this price range? While many investors enjoy a certain thrill that comes with trading penny stocks, it's a dangerous game. So to avoid the inherent dangers, we turn to the larger companies that are still offered at lower prices.
To identify some of the attractively-priced stocks that investors should be wary of, we then screened for 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 in the future, despite their high growth projections.
For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.
Do you think these companies are in trouble, or are hedge funds calling it wrong? Use this list as a starting point for your own analysis.
1. Bona Film Group Limited (NASDAQ:BONA): Distributes films in the People's Republic of China. Market cap at $608.05M, most recent closing price at $5.0. Net institutional sales in the current quarter at -1.1M shares, which represents about 38.06% of the company's float of 2.89M shares. 5-year EPS growth at 38.7%. The top 2 sellers of the stock are Tremblant Capital, and Schroder Investment Management.
2. Navios Maritime Holdings Inc. (NYSE:NM): Operates as a seaborne shipping and logistics company in Greece. Market cap at $384.11M, most recent closing price at $3.75. Net institutional sales in the current quarter at -4.2M shares, which represents about 5.41% of the company's float of 77.68M shares. 5-year EPS growth at 16%. The top 2 sellers of the stock are Glickenhaus & Co., and AL Frank Asset Management.
3. SIRIUS XM Radio Inc. (NASDAQ:SIRI): Provides satellite radio services in the United States and Canada. Market cap at $16.14B, most recent closing price at $3.10. Net institutional sales in the current quarter at -173.4M shares, which represents about 5.49% of the company's float of 3.16B shares. 5-year EPS growth at 28%. The top 2 sellers of the stock are UBS AG, and Asian Century Quest Capital LLC.
*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: 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.