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Soon we’ll be entering the second week of earnings season, and there are many companies on the week’s roster. One way to create a watchlist is by considering the smart-money sentiment of the reporting companies.

Below we present a list of 12 companies on next week’s schedule that have seen net selling by both institutions and mutual funds over the last two quarters.

Although sentiment has been bearish on these names until now, do you think this bearishness could present an opportunity for an earnings surprise? Use this list as a starting-off point for your own analysis into the reporting companies.



List sorted by earnings release date.

1. Boeing Co. (BA): Aerospace/Defense Products & Services Industry. Market cap of $53.87B. The company is releasing earnings on 4/18/11. Net institutional shares sold over the current quarter at 2.4M and 5.5M net institutional shares sold during the previous quarter. Net mutual fund shares sold over the current quarter at 7.9M and 6.2M net mutual fund shares sold during the previous quarter. The stock has gained 4.37% over the last year.



2. Johnson & Johnson (JNJ): Drug Manufacturer. Market cap of $164.25B. The company is releasing earnings on 4/19/11. Net institutional shares sold over the current quarter at 139.0M and 18.1M net institutional shares sold during the previous quarter. Net mutual fund shares sold over the current quarter at 7.8M and 891.7K net mutual fund shares sold during the previous quarter. The stock offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 3.6%, current ratio at 2.05, and quick ratio at 1.82. The stock has lost 5.11% over the last year.



3. PACCAR Inc. (PCAR): Trucks & Other Vehicles Industry. Market cap of $18.39B. The company is releasing earnings on 4/19/11. Net institutional shares sold over the current quarter at 6.9M and 2.0M net institutional shares sold during the previous quarter. Net mutual fund shares sold over the current quarter at 3.8M and 4.1M net mutual fund shares sold during the previous quarter. The stock has gained 9.92% over the last year.



4. International Business Machines Corp. (IBM): Diversified Computer Systems Industry. Market cap of $199.09B. The company is releasing earnings on 4/19/11. Net institutional shares sold over the current quarter at 4.9M and 13.8M net institutional shares sold during the previous quarter. Net mutual fund shares sold over the current quarter at 3.3M and 256.3K net mutual fund shares sold during the previous quarter. Risk-averse investors may appreciate that IBM has a relatively low correlation to the market (beta = 0.73). The stock has gained 26.7% over the last year.

5. Lam Research Corporation (LRCX): Semiconductor Equipment & Materials Industry. Market cap of $6.42B. The company is releasing earnings on 4/20/11. Net institutional shares sold over the current quarter at 2.4M and 1.1M net institutional shares sold during the previous quarter. Net mutual fund shares sold over the current quarter at 3.1M and 9.8M net mutual fund shares sold during the previous quarter. After a solid performance over the last year, LRCX has pulled back during recent sessions. The stock is 4.72% below its SMA20 and 5.04% below its SMA50, but remains 10.23% above its SMA200. The stock has gained 29.88% over the last year.

6. Abbott Laboratories (ABT): Drug Manufacturer. Market cap of $78.97B. The company is releasing earnings on 4/20/11. Net institutional shares sold over the current quarter at 20.3M and 10.0M net institutional shares sold during the previous quarter. Net mutual fund shares sold over the current quarter at 25.3M and 19.3M net mutual fund shares sold during the previous quarter. The stock has gained 0.2% over the last year.

7. Diamond Offshore Drilling Inc. (DO): Oil & Gas Drilling & Exploration Industry. Market cap of $10.58B. The company is releasing earnings on 4/21/11. Net institutional shares sold over the current quarter at 6.3M and 2.7M net institutional shares sold during the previous quarter. Net mutual fund shares sold over the current quarter at 10.7M and 2.9M net mutual fund shares sold during the previous quarter. It's been a rough couple of days for the stock, losing 5.07% over the last week.

8. Gilead Sciences Inc. (GILD): Biotechnology Industry. Market cap of $32.62B. The company is releasing earnings on 4/21/11. Net institutional shares sold over the current quarter at 18.4M and 36.7M net institutional shares sold during the previous quarter. Net mutual fund shares sold over the current quarter at 5.8M and 9.9M net mutual fund shares sold during the previous quarter. The stock might be undervalued at current levels, with a PEG ratio at 0.82, and P/FCF ratio at 11.77. The stock has lost 10.68% over the last year.

9. The Travelers Companies, Inc. (TRV): Property & Casualty Insurance Industry. Market cap of $25.73B. The company is releasing earnings on 4/21/11. Net institutional shares sold over the current quarter at 12.1M and 8.5M net institutional shares sold during the previous quarter. Net mutual fund shares sold over the current quarter at 6.5M and 3.9M net mutual fund shares sold during the previous quarter. The stock has gained 15.95% over the last year.

10. McDonald's Corp. (MCD): Restaurants Industry. Market cap of $79.98B. The company is releasing earnings on 4/21/11. Net institutional shares sold over the current quarter at 8.9M and 9.3M net institutional shares sold during the previous quarter. Net mutual fund shares sold over the current quarter at 11.9M and 5.1M net mutual fund shares sold during the previous quarter. MCD offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 3.18%, current ratio at 1.49, and quick ratio at 1.46. The stock has gained 13.99% over the last year.

11. The Sherwin-Williams Company (SHW): Specialty Retail Industry. Market cap of $9.0B. The company is releasing earnings on 4/21/11. Net institutional shares sold over the current quarter at 399.7K and 1.1M net institutional shares sold during the previous quarter. Net mutual fund shares sold over the current quarter at 1.3M and 2.1M net mutual fund shares sold during the previous quarter. The stock has gained 17.45% over the last year.

12. The Chubb Corporation (CB): Property & Casualty Insurance Industry. Market cap of $18.12B. The company is releasing earnings on 4/21/11. Net institutional shares sold over the current quarter at 3.4M and 7.2M net institutional shares sold during the previous quarter. Net mutual fund shares sold over the current quarter at 6.0M and 9.7M net mutual fund shares sold during the previous quarter. The stock has gained 20.28% over the last year.

*Institutional and mutual fund 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.

Source: 12 Companies Reporting Next Week, Being Dumped by the Big Money