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If you're a contrarian looking for stocks being dragged down by extreme pessimism, this list might offer an interesting starting point for your own analysis.

All of the stocks mentioned below have seen significant selling by insider executives over the last year. In addition, all of these stocks have seen two consecutive quarters of net selling by institutional and mutual fund investors.

The smart money has been dumping these stocks over the last six months, but does this extreme pessimism create opportunities? Full details below.

Insider trading data sourced from Yahoo Finance, institutional and mutual fund data sourced from Fidelity.
Click for expanded image


The list has been sorted by the change in shares held by insiders.

1. Rockwell Collins Inc. (NYSE:COL): Aerospace/Defense Products and Services Industry. Market cap of $9.96B. The stock has gained 8.9% over the last year.

Insiders have sold 702,500 shares over the last six months (represents a -68.9% decline in shares owned by insiders).

Shares held by institutional investors declined by -5.1M shares this quarter, vs. a decline of -803.3K shares in the previous quarter. Similarly, shares held by mutual fund investors declined by -1.8M shares this quarter, vs. a decline of -1.5M in the previous quarter.

2. Cisco Systems, Inc. (NASDAQ:CSCO): Networking and Communication Devices Industry. Market cap of $101.72B. The stock has performed poorly over the last month, losing 14.89%.

Insiders have sold 6,620,750 shares over the last six months (represents a -60.7% decline in shares owned by insiders).

Shares held by institutional investors declined by -445.8M shares this quarter, vs. a decline of -131.5M shares in the previous quarter. Similarly, shares held by mutual fund investors declined by -82.6M shares this quarter, vs. a decline of -45.7M in the previous quarter.

The stock is currently stuck in a downtrend, trading -6.35% below its SMA20, -10.67% below its SMA50, and -16.28% below its SMA200.

3. Hewlett-Packard Company (NYSE:HPQ): Diversified Computer Systems Industry. Market cap of $92.66B. The stock has lost 17.52% over the last year.

Insiders have sold 1,649,900 shares over the last six months (represents a -58.7% decline in shares owned by insiders).

Shares held by institutional investors declined by -148.2M shares this quarter, vs. a decline of -165.0M shares in the previous quarter. Similarly, shares held by mutual fund investors declined by -19.9M shares this quarter, vs. a decline of -49.7M in the previous quarter.

4. L-3 Communications Holdings Inc. (NYSE:LLL): Aerospace/Defense Products and Services Industry. Market cap of $9.16B. The stock has lost 13.14% over the last year.

Insiders have sold 278,451 shares over the last six months (represents a -42.5% decline in shares owned by insiders).

Shares held by institutional investors declined by -3.4M shares this quarter, vs. a decline of -1.3M shares in the previous quarter. Similarly, shares held by mutual fund investors declined by -671.9K shares this quarter, vs. a decline of -338.4K in the previous quarter.

5. Entergy Corporation (NYSE:ETR): Electric Utilities Industry. Market cap of $12.94B. The stock has lost 4.98% over the last year.

Insiders have sold 237,088 shares over the last six months (represents a -41.2% decline in shares owned by insiders).

Shares held by institutional investors declined by -6.3M shares this quarter, vs. a decline of -6.1M shares in the previous quarter. Similarly, shares held by mutual fund investors declined by -1.7M shares this quarter, vs. a decline of -1.9M in the previous quarter.

ETR has relatively low correlation to the market (beta = 0.62), which may be appealing to risk averse investors.

6. General Mills Inc. (NYSE:GIS): Processed and Packaged Goods Industry. Market cap of $23.37B. The stock has gained 4.22% over the last year.

Insiders have sold 450,863 shares over the last six months (represents a -39.4% decline in shares owned by insiders).

Shares held by institutional investors declined by -10.7M shares this quarter, vs. a decline of -15.2M shares in the previous quarter. Similarly, shares held by mutual fund investors declined by -252.0K shares this quarter, vs. a decline of -4.2M in the previous quarter.

7. McDonald's Corp. (NYSE:MCD): Restaurants Industry. Market cap of $79.32B. The stock has gained 23.27% over the last year.

Insiders have sold 325,384 shares over the last six months (represents a -37.7% decline in shares owned by insiders).

Shares held by institutional investors declined by -8.6M shares this quarter, vs. a decline of -9.7M shares in the previous quarter. Similarly, shares held by mutual fund investors declined by -15.5M shares this quarter, vs. a decline of -998.4K in the previous quarter.

Note that MCD offers a good dividend, and appears to have good liquidity to back it up - dividend yield at 3.21%, current ratio at 1.49, and quick ratio at 1.46.

8. Becton, Dickinson and Company (NYSE:BDX): Medical Instruments and Supplies Industry. Market cap of $17.74B.

Insiders have sold 726,386 shares over the last six months (represents a -34.2% decline in shares owned by insiders).

Shares held by institutional investors declined by -4.8M shares this quarter, vs. a decline of -5.0M shares in the previous quarter. Similarly, shares held by mutual fund investors declined by -647.5K shares this quarter, vs. a decline of -316.3K in the previous quarter.

9. DTE Energy Co. (NYSE:DTE):
Electric Utilities Industry. Market cap of $8.09B.

Insiders have sold 343,636 shares over the last six months (represents a -32.2% decline in shares owned by insiders).

Shares held by institutional investors declined by -966.2K shares this quarter, vs. a decline of -4.2M shares in the previous quarter. Similarly, shares held by mutual fund investors declined by -1.2M shares this quarter, vs. a decline of -426.0K in the previous quarter.

10. WellPoint Inc. (NYSE:WLP):
Health Care Plans Industry. Market cap of $25.53B.

Insiders have sold 316,058 shares over the last six months (represents a -31.7% decline in shares owned by insiders).

Shares held by institutional investors declined by -13.0M shares this quarter, vs. a decline of -7.7M shares in the previous quarter. Similarly, shares held by mutual fund investors declined by -7.7M shares this quarter, vs. a decline of -8.3M in the previous quarter.

11. The TJX Companies, Inc. (NYSE:TJX)
: Department Stores Industry. Market cap of $20.02B.

Insiders have sold 767,039 shares over the last six months (represents a -30.2% decline in shares owned by insiders).

Shares held by institutional investors declined by -11.7M shares this quarter, vs. a decline of -3.6M shares in the previous quarter. Similarly, shares held by mutual fund investors declined by -2.0M shares this quarter, vs. a decline of -4.4M in the previous quarter.

12. Community Health Systems, Inc. (NYSE:CYH): Hospitals Industry. Market cap of $3.83B.

Insiders have sold 1,004,320 shares over the last six months (represents a -28.4% decline in shares owned by insiders).

Shares held by institutional investors declined by -618.0K shares this quarter, vs. a decline of -4.2M shares in the previous quarter. Similarly, shares held by mutual fund investors declined by -2.8M shares this quarter, vs. a decline of -2.1M in the previous quarter.

13. Hershey Co. (NYSE:HSY):
Confectioners Industry. Market cap of $12.03B.

Insiders have sold 47,000 shares over the last six months (represents a -17.9% decline in shares owned by insiders).

Shares held by institutional investors declined by -2.0M shares this quarter, vs. a decline of -1.3M shares in the previous quarter. Similarly, shares held by mutual fund investors declined by -979.4K shares this quarter, vs. a decline of -2.0M in the previous quarter.

14. Ball Corporation (NYSE:BLL):
Packaging and Containers Industry. Market cap of $6.33B. The stock has gained 31.34% over the last year.

Insiders have sold 326,468 shares over the last six months (represents a -17.6% decline in shares owned by insiders).

Shares held by institutional investors declined by -808.2K shares this quarter, vs. a decline of -5.3M shares in the previous quarter. Similarly, shares held by mutual fund investors declined by -365.2K shares this quarter, vs. a decline of -4.1M in the previous quarter.

15. The Chubb Corporation (NYSE:CB): Property and Casualty Insurance Industry. Market cap of $17.54B. The stock has gained 18.26% over the last year.

Insiders have sold 155,346 shares over the last six months (represents a -17.% decline in shares owned by insiders).

Shares held by institutional investors declined by -2.9M shares this quarter, vs. a decline of -7.3M shares in the previous quarter. Similarly, shares held by mutual fund investors declined by -6.3M shares this quarter, vs. a decline of -9.2M in the previous quarter.

Note that CB might be undervalued at current levels, with a PEG ratio at 0.92, and P/FCF ratio at 9.6.

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

Source: Extreme Pessimism: 15 Stocks Being Dumped by Insiders and Institutional Investors