Seeking Alpha
Value, growth, long-term horizon, medium-term horizon
Profile| Send Message| ()  

Looking to invest in what others are throwing away? Then this may be an interesting starting point for your own analysis.

To compile this list we began with a universe of over 60 stocks that had recently seen the 50-day MA cross below the 200-day MA, a momentum indicator often called the "Death Cross."

We then studied the flow of mutual fund interest for these names and focused on those that had experienced, on a net basis, mutual funds selling over the last two quarters.

We last wrote about this screen on April 12. On that day, the screen produced 12 companies. Since then, 8 out of 12 companies mentioned in that article have outperformed the S&P 500 index (a success rate of 66.67%). The screen averaged a price-weighted return of 3.3% vs. an index return of 2.1%. Click here to access a full breakdown of the screen's past performance.

click for expanded images



With past performance in mind, we decided to run the same screen today, and see which companies show up in the update.

Considering this information, do you think any of these stocks are being underestimated? Full details below.

1. Baldwin & Lyons Inc. (BWINB): Property & Casualty Insurance Industry. Market cap of $328.34M. SMA50 at $9.1 vs. SMA200 at $9.22 (current price at $22.0). On a net basis, mutual funds sold -336.9K shares the most recent quarter and -3.8K shares the previous quarter. The stock has lost 10.00% over the last year.

2. Brookline Bancorp, Inc. (BRKL): Savings & Loans Industry. Market cap of $509.77M. SMA50 at $9.85 vs. SMA200 at $9.96 (current price at $8.7). On a net basis, mutual funds sold -57.7K shares the most recent quarter and -273.4K shares the previous quarter. It's been a rough couple of days for the stock, losing 5.27% over the last week.

3. China Nepstar Chain Drugstore Ltd. (NPD):
Drug Stores Industry. Market cap of $326.31M. SMA50 at $9.62 vs. SMA200 at $9.84 (current price at $3.35). On a net basis, mutual funds sold -18.4K shares the most recent quarter and -112.0K shares the previous quarter. It's been a rough couple of days for the stock, losing 8.99% over the last week.

4. Lamar Advertising Co. (LAMR): Marketing Services Industry. Market cap of $2.79B. SMA50 at $9.95 vs. SMA200 at $9.99 (current price at $30.06). On a net basis, mutual funds sold -986.4K shares the most recent quarter and -625.8K shares the previous quarter. This is a risky stock that is significantly more volatile than the overall market (beta = 2.68). The stock has lost 14.13% over the last year.

*Mutual funds flows sourced from Fidelity, other relevant 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: 4 Stocks With Bearish Momentum Being Sold by Mutual Funds