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How can you decide which penny stocks are worth your time? One way is to analyze the trend set by institutional investors. In general, institutions have management teams doing heavy analysis and who are privy to more information than most.

The penny stocks we listed below are priced under $5, with market caps above $200M. Most importantly, all these names have seen significant institutional buying over the current quarter – representing over 10% of the share float.

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.

We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance.



If you’re a follower of institutional investing trends, you may feel good times are to come for these penny stocks. Use the list information below to start your own analysis.


List sorted by % of share float.


1. Abraxas Petroleum Corp. (NASDAQ:AXAS):
Independent Oil & Gas Industry. Market cap of $290.78M. Price at $3.31. Net Institutional purchases over the current quarter at 18.3M, representing 24.84% of the company's 73.66M share float. The stock is a short squeeze candidate, with a short float at 13.88% (equivalent to 6.7 days of average volume). It's been a rough couple of days for the stock, losing 14.32% over the last week.

2. Corcept Therapeutics Inc. (NASDAQ:CORT): Biotechnology Industry. Market cap of $361.91M. Price at $4.47. Net Institutional purchases over the current quarter at 10.4M, representing 20.62% of the company's 50.44M share float. The stock has gained 25.29% over the last year.

3. The McClatchy Company (NYSE:MNI): Publishing Industry. Market cap of $204.29M. Price at $2.47. Net Institutional purchases over the current quarter at 7.6M, representing 19.27% of the company's 39.43M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 3.19). The stock is a short squeeze candidate, with a short float at 41.62% (equivalent to 22.61 days of average volume).

4. Hyperdynamics Corporation (NYSE:HDY): Oil & Gas Drilling & Exploration Industry. Market cap of $700.90M. Price at $4.43. Net Institutional purchases over the current quarter at 23.9M, representing 18.2% of the company's 131.31M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.41). The stock is a short squeeze candidate, with a short float at 12.73% (equivalent to 5.86 days of average volume). The stock has had a couple of great days, gaining 8.74% over the last week.

5. BPZ Resources, Inc. (NYSE:BPZ): Oil & Gas Drilling & Exploration Industry. Market cap of $352.70M. Price at $3.19. Net Institutional purchases over the current quarter at 11.9M, representing 17.98% of the company's 66.19M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.26). The stock is a short squeeze candidate, with a short float at 19.69% (equivalent to 9.59 days of average volume). It's been a rough couple of days for the stock, losing 15.56% over the last week.

6. Chelsea Therapeutics International Ltd. (NASDAQ:CHTP): Biotechnology Industry. Market cap of $280.18M. Price at $4.89. Net Institutional purchases over the current quarter at 8.6M, representing 17.78% of the company's 48.37M share float. The stock is a short squeeze candidate, with a short float at 7.8% (equivalent to 7.51 days of average volume). The stock has had a couple of great days, gaining 6.59% over the last week.

7. DHT Holdings, Inc. (NYSE:DHT): Shipping Industry. Market cap of $227.83M. Price at $3.76. Net Institutional purchases over the current quarter at 8.7M, representing 17.55% of the company's 49.58M share float. Relatively low correlation to the market (beta = 0.76), which may be appealing to risk averse investors. The stock has performed poorly over the last month, losing 13.51%.

8. Wet Seal Inc. (WTSLA): Apparel Stores Industry. Market cap of $398.04M. Price at $3.94. Net Institutional purchases over the current quarter at 16.4M, representing 17.38% of the company's 94.34M share float. The stock is a short squeeze candidate, with a short float at 19.54% (equivalent to 7.4 days of average volume).

9. Sprott Resource Lending Corp. (SILU): Mortgage Investment Industry. Market cap of $269.47M. Price at $1.76. Net Institutional purchases over the current quarter at 14.4M, representing 15.59% of the company's 92.37M share float. The stock has gained 25.18% over the last year.

10. Merge Healthcare Incorporated. (NASDAQ:MRGE): Healthcare Information Services Industry. Market cap of $397.75M. Price at $4.93. Net Institutional purchases over the current quarter at 3.1M, representing 15.38% of the company's 20.15M share float. The stock has performed poorly over the last month, losing 20.14%.

11. General Moly, Inc. (NYSEMKT:GMO): Industrial Metals & Minerals Industry. Market cap of $398.35M. Price at $4.51. Net Institutional purchases over the current quarter at 8.3M, representing 14.94% of the company's 55.57M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.84). The stock is a short squeeze candidate, with a short float at 10.4% (equivalent to 5.22 days of average volume). The stock has gained 22.28% over the last year.

12. ChinaCast Education Corporation (OTCPK:CAST): Education & Training Services Industry. Market cap of $218.53M. Price at $4.67. Net Institutional purchases over the current quarter at 4.8M, representing 13.81% of the company's 34.77M share float. The stock is a short squeeze candidate, with a short float at 24.31% (equivalent to 12.82 days of average volume). It's been a rough couple of days for the stock, losing 19.15% over the last week.

13. CapLease, Inc. (NYSE:LSE): REIT. Market cap of $321.92M. Price at $4.82. Net Institutional purchases over the current quarter at 8.0M, representing 13.32% of the company's 60.08M share float. The stock has performed poorly over the last month, losing 11.59%.

14. Newcastle Investment Corp. (NYSE:NCT): REIT. Market cap of $336.94M. Price at $4.51. Net Institutional purchases over the current quarter at 9.4M, representing 12.87% of the company's 73.04M share float. It's been a rough couple of days for the stock, losing 14.49% over the last week.

15. Capstone Turbine Corp. (NASDAQ:CPST): Industrial Electrical Equipment Industry. Market cap of $418.17M. Price at $1.73. Net Institutional purchases over the current quarter at 26.8M, representing 12.86% of the company's 208.47M share float. The stock is a short squeeze candidate, with a short float at 17.4% (equivalent to 9.92 days of average volume). The stock has gained 47.83% over the last year.

16. GMX Resources Inc. (GMXR): Independent Oil & Gas Industry. Market cap of $281.86M. Price at $4.84. Net Institutional purchases over the current quarter at 6.7M, representing 12.21% of the company's 54.86M share float. The stock has lost 32.66% over the last year.

17. Vantage Drilling Company (NYSEMKT:VTG): Oil & Gas Drilling & Exploration Industry. Market cap of $539.66M. Price at $1.84. Net Institutional purchases over the current quarter at 19.8M, representing 11.73% of the company's 168.85M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.02). The stock has gained 19.23% over the last year.

18. New York & Company Inc. (NYSE:NWY): Apparel Stores Industry. Market cap of $273.82M. Price at $4.46. Net Institutional purchases over the current quarter at 3.1M, representing 11.68% of the company's 26.54M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.86).

19. Bona Film Group Limited (NASDAQ:BONA): Entertainment Industry. Market cap of $266.50M. Price at $4.09. Net Institutional purchases over the current quarter at 2.0M, representing 11.22% of the company's 17.82M share float. It's been a rough couple of days for the stock, losing 8.1% over the last week.

20. Cowen Group, Inc. (NASDAQ:COWN): Investment Brokerage Industry. Market cap of $272.41M. Price at $3.68. Net Institutional purchases over the current quarter at 4.4M, representing 10.94% of the company's 40.21M share float. The stock is a short squeeze candidate, with a short float at 9.47% (equivalent to 16.34 days of average volume). It's been a rough couple of days for the stock, losing 8.86% over the last week.

21. Augusta Resource Corp. (NYSEMKT:AZC): Industrial Metals & Minerals Industry. Market cap of $575.52M. Price at $4.17. Net Institutional purchases over the current quarter at 8.4M, representing 10.14% of the company's 82.82M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.12). It's been a rough couple of days for the stock, losing 7.14% over the last week.

*Institutional data sourced from Fidelity, all other data sourced from Finviz. Information gathered June 14, 2011.

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

Source: 21 Stocks Under $5 Seeing Significant Institutional Buying