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The following is a list of oversold stocks, as determined by the Relative Strength, or RSI(14), indicator. All of the stocks mentioned below have seen significant institutional inflows over the past three months.

To compile this list, we started with a universe of over 120 stocks with RSI(14) values between 25 and 40, which usually signal oversold conditions. We collected data on institutional flows and ranked them by change in institutional ownership over the past three months.

The smart money seems to think this excessive pessimism isn't justified--what do you think? Full details below.

Institutional data sourced from Reuters, short float RSI(14) data sourced from Finviz.

click for expanded image

The list has been sorted by the change in institutional ownership over the past three months.

1. Allscripts Healthcare Solutions, Inc. (NASDAQ:MDRX): Healthcare Information Services Industry. Market cap of $3.34B. RSI(14) at 31.75. Institutional investors currently own 142,954,378 vs. 66,419,290 shares held three months ago (+115.23% change). Short float at 2.09%, which implies a short ratio of 1.24 days. The stock has lost -10.71% over the last year.

2. The Governor and Company of The Bank of Ireland (NYSE:IRE): Foreign Regional Banks Industry. Market cap of $2.94B. RSI(14) at 32.12. Institutional investors currently own 8,015,272 vs. 4,227,243 shares held three months ago (+89.61% change). Short float at 0.06%, which implies a short ratio of 0.19 days. The stock has lost -78.08% over the last year.

3. Cninsure Inc. (NASDAQ:CISG): Insurance Brokers Industry. Market cap of $999.53M. RSI(14) at 31.64. Institutional investors currently own 26,629,936 vs. 21,116,756 shares held three months ago (+26.11% change). Short float at 7.1%, which implies a short ratio of 5.68 days. The stock has gained 5.59% over the last year.

4. Garmin Ltd. (NASDAQ:GRMN): Scientific & Technical Instruments Industry. Market cap of $5.58B. RSI(14) at 33.02. Institutional investors currently own 69,736,366 vs. 60,453,730 shares held three months ago (+15.35% change). Short float at 16.84%, which implies a short ratio of 13 days. The stock has lost -0.31% over the last year.

5. Newpark Resources Inc. (NYSE:NR): Oil & Gas Equipment & Services Industry. Market cap of $518.28M. RSI(14) at 33.03. Institutional investors currently own 92,548,523 vs. 81,599,986 shares held three months ago (+13.42% change). Short float at 7.74%, which implies a short ratio of 3.67 days. The stock has gained 105.38% over the last year.

6. Liquidity Services, Inc. (NASDAQ:LQDT): Internet Software & Services Industry. Market cap of $405.13M. RSI(14) at 32.95. Institutional investors currently own 16,937,257 vs. 14,940,883 shares held three months ago (+13.36% change). Short float at 5.39%, which implies a short ratio of 5.03 days. The stock has gained 83.92% over the last year.

7. NPS Pharmaceuticals, Inc. (NASDAQ:NPSP): Biotechnology Industry. Market cap of $409.61M. RSI(14) at 32.95. Institutional investors currently own 58,342,553 vs. 51,851,843 shares held three months ago (+12.52% change). Short float at 3.86%, which implies a short ratio of 6.38 days. The stock has gained 98.7% over the last year.

8. Royal Bank of Scotland Group plc (NYSE:RBS): Foreign Bank. Market cap of $79.36B. RSI(14) at 31.51. Institutional investors currently own 4,304,901 vs. 3,849,464 shares held three months ago (+11.83% change). Short float at 0.05%, which implies a short ratio of 1.54 days. The stock has gained 11.81% over the last year.

9. Campbell Soup Co. (NYSE:CPB): Processed & Packaged Goods Industry. Market cap of $11.69B. RSI(14) at 30.67. Institutional investors currently own 133,609,118 vs. 122,214,398 shares held three months ago (+9.32% change). Short float at 9.9%, which implies a short ratio of 7.09 days. The stock has gained 5.29% over the last year.

10. Health Care REIT Inc. (NYSE:HCN): REIT. Market cap of $6.2B. RSI(14) at 30.66. Institutional investors currently own 108,627,593 vs. 100,016,440 shares held three months ago (+8.61% change). Short float at 6.51%, which implies a short ratio of 6.1 days. The stock has gained 9.73% over the last year.

11. Perfect World Co., Ltd. (NASDAQ:PWRD): Application Software Industry. Market cap of $1.28B. RSI(14) at 32.99. Institutional investors currently own 32,293,439 vs. 29,757,962 shares held three months ago (+8.52% change). Short float at 8.36%, which implies a short ratio of 3.71 days. The stock has lost -41.83% over the last year.

12. TransCanada Corp. (NYSE:TRP): Gas Utilities Industry. Market cap of $24.42B. RSI(14) at 30.37. Institutional investors currently own 419,260,235 vs. 388,320,587 shares held three months ago (+7.97% change). Short float at 0.16%, which implies a short ratio of 3.52 days. The stock has gained 19.4% over the last year.

13. Deutsche Bank AG (NYSE:DB): Foreign Bank. Market cap of $33.51B. RSI(14) at 32.71. Institutional investors currently own 284,343,652 vs. 263,444,180 shares held three months ago (+7.93% change). Short float at 0.55%, which implies a short ratio of 2.31 days. The stock has lost -25.97% over the last year.

14. Euronet Worldwide Inc. (NASDAQ:EEFT): Business Services Industry. Market cap of $869.53M. RSI(14) at 28.87. Institutional investors currently own 45,719,333 vs. 42,395,129 shares held three months ago (+7.84% change). Short float at 6.75%, which implies a short ratio of 12.63 days. The stock has lost -23.38% over the last year.

15. Banco Bilbao Vizcaya Argentaria, S.A. (NYSE:BBVA): Foreign Regional Banks Industry. Market cap of $41.86B. RSI(14) at 25.47. Institutional investors currently own 40,284,919 vs. 37,464,955 shares held three months ago (+7.53% change). Short float at 0.22%, which implies a short ratio of 3.76 days. The stock has lost -38.53% over the last year.

16. National Financial Partners Corp. (NYSE:NFP): Insurance Brokers Industry. Market cap of $537.58M. RSI(14) at 33.06. Institutional investors currently own 41,757,104 vs. 39,006,337 shares held three months ago (+7.05% change). Short float at 10.64%, which implies a short ratio of 9.67 days. The stock has gained 41.33% over the last year.

17. GT Solar International, Inc. (SOLR): Semiconductor Industry. Market cap of $1.07B. RSI(14) at 32.53. Institutional investors currently own 150,278,866 vs. 140,860,805 shares held three months ago (+6.69% change). Short float at 8.47%, which implies a short ratio of 3.48 days. The stock has gained 50.21% over the last year.

18. Danaos Corporation (NYSE:DAC): Shipping Industry. Market cap of $433.35M. RSI(14) at 29.21. Institutional investors currently own 1,854,037 vs. 1,739,058 shares held three months ago (+6.61% change). Short float at 0.22%, which implies a short ratio of 1.67 days. The stock has lost -9.73% over the last year.

19. Omega Healthcare Investors Inc. (NYSE:OHI): REIT Market cap of $2.09B. RSI(14) at 30.55. Institutional investors currently own 87,466,896 vs. 82,070,291 shares held three months ago (+6.58% change). Short float at 5.3%, which implies a short ratio of 5.89 days. The stock has gained 25.86% over the last year.

20. Alexandria Real Estate Equities Inc. (NYSE:ARE): REIT. Market cap of $3.72B. RSI(14) at 26.75. Institutional investors currently own 58,772,850 vs. 55,384,327 shares held three months ago (+6.12% change). Short float at 4.18%, which implies a short ratio of 4.33 days. The stock has gained 19.49% over the last year.

Disclosure: No positions

Source: Top 20 Oversold Stocks Being Bought by Smart Money