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In the face of another economic downturn we decided to take a look at companies that have outperformed dips in the market before. In particular, we focused on the financial crisis from August 2007 through March 2009.

We took a look at the 600 largest companies, and analyzed their closing prices on 10/01/07 and 03/01/09. Only those stocks that performed with a minimum 10% alpha against the S&P500 (SPY) during the economic downturn were kept.

We were left with 175 names. To create our final list we searched for companies experiencing significant levels of institutional selling in the current quarter.

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.

(Click for interactive chart)

If these companies were able to outperform the market during the last economic downturn, why are institutions so pessimistic in the current environment?

Are investors playing it smart or have they forgotten their history lessons? Use the list below as a starting point for your own analysis.

1. ResMed Inc. (RMD): Medical Appliances & Equipment Industry. Market cap of $4.73B. On 10/01/07 the closing price was at $42.84, compared with the closing price on 03/01/09 of $36.88. This implies a price return of -13.91% (the alpha vs. S&P 500 during the downturn at 38.57%). In the current quarter institutions have sold 9.3M shares, or 6.17% of the 150.84M share float.The stock is a short squeeze candidate, with a short float at 10.41% (equivalent to 16.08 days of average volume). The stock has gained 3.17% over the last year.

2. Copart, Inc. (CPRT): Auto Dealerships Industry. Market cap of $3.21B. On 10/01/07 the closing price was at $34, compared with the closing price on 03/01/09 of $27.02. This implies a price return of -20.53% (the alpha vs. S&P 500 during the downturn at 31.95%). In the current quarter institutions have sold 9.7M shares, or 17.36% of the 55.86M share float. The stock has gained 7.55% over the last year.

3. Dolby Laboratories, Inc. (DLB): Diversified Electronics Industry. Market cap of $4.75B. On 10/01/07 the closing price was at $35.79, compared with the closing price on 03/01/09 of $28.05. This implies a price return of -21.63% (the alpha vs. S&P 500 during the downturn at 30.86%). In the current quarter institutions have sold 2.5M shares, or 4.73% of the 52.81M share float. The stock has lost 13.72% over the last year.

4. Urban Outfitters Inc. (URBN): Apparel Stores Industry. Market cap of $4.50B. On 10/01/07 the closing price was at $22.28, compared with the closing price on 03/01/09 of $16.64. This implies a price return of -25.31% (the alpha vs. S&P 500 during the downturn at 27.17%). In the current quarter institutions have sold 13.6M shares, or 11.35% of the 119.82M share float. The stock is a short squeeze candidate, with a short float at 17.01% (equivalent to 6.3 days of average volume). The stock has lost 5.63% over the last year.

5. Skyworks Solutions Inc. (SWKS): Semiconductor Circuits Industry. Market cap of $4.28B. On 10/01/07 the closing price was at $9, compared with the closing price on 03/01/09 of $6.5. This implies a price return of -27.78% (the alpha vs. S&P 500 during the downturn at 24.71%). In the current quarter institutions have sold 9.5M shares, or 5.14% of the 184.98M share float. The stock has lost 29.07% over the last year.

6. Arch Capital Group Ltd. (ACGL): Property & Casualty Insurance Industry. Market cap of $4.21B. On 10/01/07 the closing price was at $75.49, compared with the closing price on 03/01/09 of $54. This implies a price return of -28.47% (the alpha vs. S&P 500 during the downturn at 24.02%). In the current quarter institutions have sold 6.3M shares, or 5.31% of the 118.61M share float. The stock has lost 3.45% over the last year.

7. Laboratory Corp. of America Holdings (LH): Medical Laboratories & Research Industry. Market cap of $9.70B. On 10/01/07 the closing price was at $78.2, compared with the closing price on 03/01/09 of $55.01. This implies a price return of -29.65% (the alpha vs. S&P 500 during the downturn at 22.83%). In the current quarter institutions have sold 5.0M shares, or 5.01% of the 99.77M share float. The stock has gained 5.06% over the last year.

8. Akamai Technologies Inc. (AKAM): Internet Information Providers Industry. Market cap of $5.88B. On 10/01/07 the closing price was at $28.75, compared with the closing price on 03/01/09 of $18.09. This implies a price return of -37.08% (the alpha vs. S&P 500 during the downturn at 15.41%). In the current quarter institutions have sold 17.0M shares, or 9.37% of the 181.36M share float. The stock has had a couple of great days, gaining 5.46% over the last week.

9. Beckman Coulter Inc. (BEC): Scientific & Technical Instruments Industry. Market cap of $5.94B. On 10/01/07 the closing price was at $73.39, compared with the closing price on 03/01/09 of $44.84. This implies a price return of -38.9% (the alpha vs. S&P 500 during the downturn at 13.58%). In the current quarter institutions have sold 5.3M shares, or 7.57% of the 70.05M share float.

10. Airgas Inc. (ARG): Industrial Equipment Wholesale Industry. Market cap of $5.50B. On 10/01/07 the closing price was at $52.16, compared with the closing price on 03/01/09 of $30.79. This implies a price return of -40.97% (the alpha vs. S&P 500 during the downturn at 11.51%). In the current quarter institutions have sold 4.8M shares, or 7.27% of the 66.02M share float. The stock has gained 5.91% over the last year.

11. Gap Inc. (GPS): Apparel Stores Industry. Market cap of $9.96B. On 10/01/07 the closing price was at $18.5, compared with the closing price on 03/01/09 of $10.79. This implies a price return of -41.68% (the alpha vs. S&P 500 during the downturn at 10.81%). In the current quarter institutions have sold 19.9M shares, or 4.56% of the 436.87M share float. The stock has lost 19.73% over the last year.

*Institutional data sourced from Fidelity. All other data sourced from Finviz.

Source: 11 Stocks That Outperformed During the Downturn Are Being Sold by Institutions