12 Undervalued Large Caps Being Bought Up by Smart Money

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 |  Includes: BBY, FITB, HIG, HPQ, MET, MS, NLY, S, SLF, STI, WFC, XRX
by: Kapitall

Many analysts follow institutional investors because they’re traditionally known as the “Smart Money”; that is, they have more knowledge about companies and spend more time analyzing them than most investors.

We ran a screen focusing on the smart money, searching for large-cap stocks that have seen significant net buying from institutional investors over the current quarter. We then ran another screen to find those that were also undervalued relative to free cash flow, with P/FCF below 10.

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, click here.

Are you as bullish on these names as institutional investors appear to be? Use this list as a starting-off point for your own analysis.

List sorted by institutional shares purchased as a percent of share float.

1. MetLife, Inc. (NYSE:MET): Life Insurance Industry. Market cap of $46.80B. P/FCF at 6.73. Net institutional shares purchased over the current quarter at 167.9M shares, representing 20.04% of the company's 838.03M share float. The stock has gained 14.22% over the last year.

2. Fifth Third Bancorp (NASDAQ:FITB): Regional Banks Industry. Market cap of $11.85B. P/FCF at 3.13. Net institutional shares purchased over the current quarter at 84.8M shares, representing 9.26% of the company's 915.67M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.22). The stock has lost 0.39% over the last year.

3. Annaly Capital Management, Inc. (NYSE:NLY): REIT. Market cap of $15.07B. P/FCF at 1.21. Net institutional shares purchased over the current quarter at 68.1M shares, representing 8.42% of the company's 808.74M share float. The stock has gained 19.32% over the last year.

4. Wells Fargo & Company (NYSE:WFC): Money Center Banks Industry. Market cap of $151.59B. P/FCF at 6.08. Net institutional shares purchased over the current quarter at 249.9M shares, representing 5.06% of the company's 4.94B share float. The stock has had a good month, gaining 11.21%.

5. Hewlett-Packard Company (NYSE:HPQ): Diversified Computer Systems Industry. Market cap of $75.60B. P/FCF at 9.08. Net institutional shares purchased over the current quarter at 97.1M shares, representing 4.69% of the company's 2.07B share float. The stock has lost 19.11% over the last year.

6. Best Buy Co. Inc. (NYSE:BBY): Electronics Stores Industry. Market cap of $12.55B. P/FCF at 9.09. Net institutional shares purchased over the current quarter at 12.9M shares, representing 4.28% of the company's 301.33M share float. The stock has had a good month, gaining 12.12%.

7. SunTrust Banks, Inc. (NYSE:STI): Money Center Banks Industry. Market cap of $14.10B. P/FCF at 3.26. Net institutional shares purchased over the current quarter at 18.4M shares, representing 3.95% of the company's 465.89M share float. The stock has gained 6.62% over the last year.

8. Sprint Nextel Corp. (NYSE:S): Wireless Communications Industry. Market cap of $16.90B. P/FCF at 7.97. Net institutional shares purchased over the current quarter at 112.7M shares, representing 3.77% of the company's 2.99B share float. The stock has had a couple of great days, gaining 8.45% over the last week.

9. Hartford Financial Services Group Inc. (NYSE:HIG): Property & Casualty Insurance Industry. Market cap of $12.04B. P/FCF at 3.79. Net institutional shares purchased over the current quarter at 7.7M shares, representing 1.92% of the company's 401.04M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 3.03). The stock has gained 20.67% over the last year.

10. Xerox Corp. (NYSE:XRX): Business Equipment Industry. Market cap of $14.96B. P/FCF at 9.92. Net institutional shares purchased over the current quarter at 23.9M shares, representing 1.77% of the company's 1.35B share float. The stock has had a good month, gaining 11.72%.

11. Morgan Stanley (NYSE:MS): Investment Brokerage Industry. Market cap of $35.62B. P/FCF at 2.34. Net institutional shares purchased over the current quarter at 13.6M shares, representing 1.43% of the company's 950.00M share float. Might be undervalued at current levels, with a PEG ratio at 0.85, and P/FCF ratio at 2.34. The stock has lost 4.25% over the last year.

12. Sun Life Financial Inc. (NYSE:SLF): Life Insurance Industry. Market cap of $17.57B. P/FCF at 4.5. Net institutional shares purchased over the current quarter at 7.1M shares, representing 1.43% of the company's 497.78M share float. The stock has gained 16.85% over the last year.

*Institutional 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.