11 Small Cap Stocks Attracting Institutional Buying

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Includes: CEDC, DEP, DF, FGP, GTATQ, INCY, ISIL, IWM, MTOR, PPO, TSL, WBS
by: Kapitall

The following is a list of small cap stocks, with market caps smaller than $2.0B. All of these companies have seen significant institutional buying over the last three months.

With institutional flows already chasing these names, is there still potential for some upside? What do you think? Full details below.

Institutional data sourced from Reuters, short float and performance data sourced from Finviz. We've also included a summary of each company's recent developments.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research. Note: The numbers on top of items represent the forward P/E ratio, if available.

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

1. Webster Financial Corp. (NYSE:WBS): Regional Bank. Market cap of $1.99B. Institutional investors currently own 66,471,859 shares vs. 59,360,065 shares held three months ago (11.98% change). Short float at 4%, which implies a short ratio of 4.97 days. The stock has gained 56.29% over the last year.

- Recent Developments: The company recently announced a public offering of 6,630,000 shares of its common stock (December 2010). Warburg Pincus, the global private equity firm, completed its previously announced $115 million investment in Webster (October 2010).

2. Central European Distribution Corp. (NASDAQ:CEDC): Beverages Industry. Market cap of $1.76B. Institutional investors currently own 52,307,767 shares vs. 47,995,532 shares held three months ago (8.98% change). Short float at 2.76%, which implies a short ratio of 2.32 days. The stock has lost -26.65% over the last year.

- Recent Developments: The company lowered FY 2010 guidance (November 2010).

3. Ferrellgas Partners LP (NYSE:FGP): Oil & Gas Refining & Marketing Industry. Market cap of $1.96B. Institutional investors currently own 4,464,764 shares vs. 4,112,261 shares held three months ago (8.57% change). Short float at 0.51%, which implies a short ratio of 1.59 days. The stock has gained 36.08% over the last year.

- Recent Developments: Announced the acquisition of Bennett Gas Company, an independent propane retailer based in Augusta, Georgia (Jan 2011). Announced the acquisition of Kings River Propane, an independent propane retailer with locations in Reedley and Clovis, California (Dec 2010).

4. Dean Foods Co. (NYSE:DF): Dairy Products Industry. Market cap of $1.91B. Institutional investors currently own 164,967,109 shares vs. 152,737,270 shares held three months ago (8.01% change). Short float at 4.72%, which implies a short ratio of 1.12 days. The stock has lost -42.9% over the last year.

- Recent Developments: Northeast Dairy Farmers announced that it has reached a settlement agreement with Dean Foods Company in their class action antitrust lawsuit against the company (Dec 2010). Guided Q4 2010 EPS guidance below analysts' estimates (Nov 2010).

5. Polypore International Inc. (NYSE:PPO): Industrial Equipment & Components Industry. Market cap of $1.96B. Institutional investors currently own 44,255,646 shares vs. 41,585,463 shares held three months ago (6.42% change). Short float at 5.96%, which implies a short ratio of 4.35 days. The stock has gained 230.75% over the last year.

- Recent Developments: Announced the public offering of an aggregate of 4,000,000 shares of its common stock (Dec 2010). Reaffirmed FY 2010 guidance (May 2010).

6. GT Solar International, Inc. (SOLR): Semiconductor Industry. Market cap of $1.76B. Institutional investors currently own 159,230,894 shares vs. 150,987,322 shares held three months ago (5.46% change). Short float at 7.54%, which implies a short ratio of 3.22 days. The stock has gained 91.48% over the last year.

- Recent Developments: Announced that it has received a $33.3 million order from South Korea-based OCI Company, Ltd. for its sapphire crystallization furnaces (Jan 2011). Announced the commercial release of the DSS650, the newest version of its multicrystalline ingot growth systems for the solar PV industry (Jan 2011).

7. ArvinMeritor Inc. (ARM): Auto Parts Industry. Market cap of $1.92B. Institutional investors currently own 97,469,923 shares vs. 93,496,397 shares held three months ago (4.25% change). Short float at 14.14%, which implies a short ratio of 7.32 days. The stock has gained 86.22% over the last year.

- Recent Developments: Announced that it has completed the sale of its Body Systems business for about $30M (Jan 2011). Reaffirms Q1 2011 guidance (Dec 2010).

8. Trina Solar Ltd. (NYSE:TSL): Semiconductor Industry. Market cap of $1.97B. Institutional investors currently own 53,505,748 shares vs. 51,797,830 shares held three months ago (3.3% change). Short float at 10.22%, which implies a short ratio of 2.11 days. The stock has gained 34.88% over the last year.

- Recent Developments: Announced that its subsidiary, Changzhou Trina Solar Energy Co. Ltd, signed a supply agreement with CECEP Solar Sheyang Power Company, a subsidiary of China Energy Conservation and Environmental Protection Group (CECEP), for a ground-mounted solar project in China (Dec 2010). Signed a sales agreement to supply solar modules to SunEdison, a subsidiary of MEMC Electronic Materials, Inc. (Aug 2010).

9. Intersil Corporation (NASDAQ:ISIL): Semiconductor Industry. Market cap of $1.79B. Institutional investors currently own 132,604,162 shares vs. 129,151,912 shares held three months ago (2.67% change). Short float at 12.68%, which implies a short ratio of 6.93 days. The stock has gained 5.74% over the last year.

- Recent Developments: Announced that it has strengthened its global distribution agreement with Avnet Memec, a division of Avnet, Inc. (Jan 2011). Guided Q4 2010 revenue guidance below analysts' estimates (Oct 2010).

10. Incyte Corporation (NASDAQ:INCY): Biotechnology Industry. Market cap of $1.81B. Institutional investors currently own 139,309,741 shares vs. 135,848,499 shares held three months ago (2.55% change). Short float at 12.75%, which implies a short ratio of 8.35 days. The stock has gained 56.54% over the last year.

- Recent Developments: Announced positive top-line results from COMFORT-I, the pivotal Phase III clinical trial of INCB18424 in patients with Myelofibrosis (Dec 2010). Presented positive long-term clinical results from an ongoing open-label Phase II trial for INCB18424, oral JAK1 and JAK2 inhibitor, in patients with advanced Polycythemia Vera and essential Thrombocythemia. (Dec 2010)

11. Duncan Energy Partners LP (NYSE:DEP): Oil & Gas Pipelines Industry. Market cap of $1.85B. Institutional investors currently own 8,389,877 shares vs. 8,202,125 shares held three months ago (2.29% change). Short float at 0.7%, which implies a short ratio of 1.99 days. The stock has gained 37.4% over the last year.

- Recent Developments: Announced that a unit of its Upstream Oil & Gas segment has been awarded the construction contract for a portion of the Acadian Haynesville Extension Project (Jan 2011). Announced that it has executed $1.25 billion of senior unsecured credit facilities comprised of an $850 million revolving credit facility and a $400 million senior term loan facility (Oct 2010).

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.