Do you value the buying and selling trends of institutional investors? We ran a screen with this idea in mind.
We began by screening the financials sector for stocks with strong momentum, trading within 5% of their 52-week highs. Given the turmoil in the financials sector since 2007, we thought it would be interesting to focus on the sector once again.
We then screened 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 in the future.
There can be several reasons why fund managers are selling these financial stocks trading near highs, namely, the valuation of the company is priced into the stock, fund managers are merely reducing risk in their portfolios, a possible weak earnings season might have a negative impact on the company earnings or the macro economy is expected to continue to weigh on the financials sector.
To perform a more detailed analysis, start with the list of stocks provided below.
For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.
Tool provided by Kapitall (kapitall.com). More investing ideas on Kapitall Wire (wire.kapitall.com).
Do you think these stocks are in hot water? Use this list as a starting point for your own analysis.
1. Credit Acceptance Corp. (NASDAQ:CACC): Provides auto loans to consumers primarily in the United States. Market cap at $2.59B, most recent closing price at $105.51. The stock is trading 1.51% below its 52-week high.
Net institutional sales in the current quarter at -739.6K shares, which represents about 7.89% of the company's float of 9.37M shares. The 2 top sellers of the stock are Prescott General Partners, and Smith, Thomas W.
2. CNO Financial Group, Inc. (NYSE:CNO): Engages in the development, marketing, and administration of health insurance, annuity, individual life insurance, and other insurance products for senior and middle-income markets in the United States. Market cap at $2.23B, most recent closing price at $9.84. The stock is trading 3.59% below its 52-week high.
Net institutional sales in the current quarter at -13.5M shares, which represents about 6.67% of the company's float of 202.53M shares. The 2 top sellers of the stock are GW Capital, and Acadian Asset Management.
3. Central Pacific Financial Corp. (NYSE:CPF): Operates as the bank holding company for Central Pacific Bank that provides commercial banking services to businesses, professionals, and individuals in Hawaii. Market cap at $665.99M, most recent closing price at $15.91. The stock is trading 2.71% below its 52-week high.
Net institutional sales in the current quarter at -1.1M shares, which represents about 6.3% of the company's float of 17.46M shares. The 2 top sellers of the stock are Tricadia Capital Management, and Senator Investment Group.
*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.