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Historically, investors have been hesitant to invest in BRIC companies due to their volatile markets. Despite concerns these countries have been prone to foreign over-investment since the last decade. India for example has continued to receive foreign investment as it grows to be one of the largest emerging markets. This high return potential does not come without high risk, including high political risks, which are reflected in the market.

With this cautiousness in mind, we created a list below that might interest you.

Beginning with a universe of BRIC companies trading on the U.S. exchanges, we looked through their 13F's in search of 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.

Hedge funds are signaling that these BRIC stocks pose a risk. Do you agree with their sentiment? Use this list as a starting point for your own analysis.

The List

For an ‪interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.

1. Cia Energetica de Minas Gerais (NYSE:CIG): Engages in the generation, transformation, transmission, distribution, and sale of electric energy primarily in Minas Gerais, Brazil.

  • Market cap at $9.71B, most recent closing price at $11.38.
  • Net institutional sales in the current quarter at -35.4M shares, which represents about 6.56% of the company's float of 539.76M shares. The 2 top holders of the stock are Vontobel Asset Management, and The Vanguard Group.
  • CIG has returned 0.0% since 2/25/13, and is one of the worst performing stocks in its industry. The stock is falling behind companies like NextEra Energy, Inc. (NYSE:NEE) and Dominion Resources, Inc. (NYSE:D), which returned 7.48% and 4.32% during the same time period.
  • More to consider: CIG has a lower than average projected earnings growth rate over the next 5 years (-4.60%). This is significantly below the analyst projections for Dominion Resources, Inc. (projected EPS growth over next 5 years at 6.84%) and NextEra Energy, Inc. (projected EPS growth over next 5 years at 5.69%).

2. Shanda Games Limited (NASDAQ:GAME): Engages in the development and operation of online games in the People's Republic of China.

  • Market cap at $824.93M, most recent closing price at $3.05.
  • Net institutional sales in the current quarter at -5.3M shares, which represents about 9.51% of the company's float of 55.71M shares. The 2 top holders of the stock are Prudential Plc., and Macquarie group Limited.
  • GAME has performed poorly since 2/25/13, especially when compared to industry competitors. The stock returned 0.66% over the last month, much lower than International Game Technology (NYSE:IGT) and Activision Blizzard, Inc. (NASDAQ:ATVI), which returned 5.70% and 2.40% during the same time period. Only Electronic Arts Inc. (NASDAQ:EA) performed worse, returning 0.51%.

3. NetEase.com, Inc. (NASDAQ:NTES): Engages in the development of applications, services, and other technologies for the Internet in China.

  • Market cap at $7.2B, most recent closing price at $54.96.
  • Net institutional sales in the current quarter at -3.9M shares, which represents about 5.35% of the company's float of 72.83M shares. The 2 top holders of the stock are Orbis Holdings, and Capital Research Global Investors.
  • Unlike the other stocks on this list that have had poor 30-day performances, NTES has recorded great gains over the last month, when compared to its closest competitors. The stock returned 6.53% since 2/25/13, better than The Ultimate Software Group, Inc. (NASDAQ:ULTI) and CGI Group, Inc. (NYSE:GIB), which returned 6.07% and 1.71% during the same holding period.
  • Despite this negativity, the stock appears attractive (read: cheap) based on conventional valuation ratios relative to competitors. The stock's PEG ratio stands at 1.07, while its Price/Cash ratio stands at 2.84. Even on a Price to Free Cash Flow basis the stock looks cheap, with a ratio of 11.08, compared to CGI Group, Inc. (P/FCF ratio at 13.63) and The Ultimate Software Group, Inc. (P/FCF ratio at 116.47).

4. Renren Inc. (NYSE:RENN): Operates a social networking Internet platform in China.

  • Market cap at $385.88M, most recent closing price at $2.94.
  • Net institutional sales in the current quarter at -15.1M shares, which represents about 6.1% of the company's float of 247.67M shares. The 2 top holders of the stock are Morgan Stanley, and Allianz Asset Management.
  • RENN has performed poorly since 2/25/13, especially when compared to industry competitors. The stock returned -1.66% over the last month, much lower than Yahoo! Inc. (NASDAQ:YHOO) and Google Inc. (NASDAQ:GOOG), which returned 13.80% and 1.50% during the same time period. Only Facebook, Inc. (NASDAQ:FB) performed worse, returning -4.33%.

5. Companhia de Saneamento Basico do Estado de Sao Paulo (NYSE:SBS): Provides water and sewage services to residential, commercial, industrial, and governmental customers in the State of Sao Paulo.

  • Market cap at $5.4B, most recent closing price at $47.36.
  • Net institutional sales in the current quarter at -7.3M shares, which represents about 12.88% of the company's float of 56.66M shares. The 2 top holders of the stock are Allianz Asset Management, and Investec Asset Management.
  • Zacks Investment Research upgraded SBS to a Strong Buy on March 27. They reasoned "Solid financial results in 2012 and positive earnings surprise in two out of four trailing quarters, with an average of +11.5%, have raised our optimism for better results in the years ahead for SABESP."

6. 7 Days Group Holdings Limited (NYSE:SVN): Operates limited service economy hotels under the brand name of "7 Days Inn" in the People's Republic of China.

  • Market cap at $656.6M, most recent closing price at $13.40.
  • Net institutional sales in the current quarter at -1.2M shares, which represents about 5.72% of the company's float of 20.98M shares. The 2 top holders of the stock are Warburg Pincus, and Tremblant Capital.
  • SVN has performed poorly since 2/25/13, especially when compared to industry competitors. The stock returned 4.26% over the last month, much lower than Wyndham Worldwide Corporation (NYSE:WYN) and Marriott International, Inc. (NASDAQ:MAR), which returned 12.10% and 8.19% during the same time period. Only Expedia Inc. (NASDAQ:EXPE) performed worse, returning -1.81%.
  • Despite this, short sellers are signaling upside: SVN has a low short float compared to industry averages. The company's short float stands at 0.49%, much lower than competitors Expedia Inc. (short float at 10.85%, representing 4.78 days of trading volume) and Marriott International, Inc. (short float at 3.58%, representing 3.66 days of trading volume).

* 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 Rebecca Lipman, 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: 6 BRIC Stocks Being Sold Off By Institutional Investors