Analysts often follow the buying trends of institutional investors and company insiders. Both groups tend to have more information about companies than most investors – institutional investors spend more time analyzing these companies, while insiders always get the inside scoop.
We ran a screen on low-debt stocks seeing high cash-flow growth, comparing trailing-twelve-month operating cash flow/common equity to the company’s five-year average. We screened these companies for those seeing significant net institutional buying over the current quarter and significant net buying from insiders over the last six months.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the 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.
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Do you think these investors are calling it right? Use this list as a starting-off point for your own analysis.
List sorted by net insider purchases as a percent of share float.
1. Motorola Solutions, Inc. (MSI): Communication Equipment Industry. Market cap of $13.89B. TTM operating cash flow/common equity at 0.19 vs. 5-year average at 0.11. MRQ total debt to assets at 0.14. Net institutional shares purchased over the current quarter at 22.7M, which is 8.12% of the company's 279.46M share float. Net insider purchases over the last six months at 17.60M, which is 6.30% of the company's share float. It's been a rough couple of days for the stock, losing 5.64% over the last week.
2. AbitibiBowater Inc. Common Stoc (ABH): Paper & Paper Products Industry. Market cap of $1.54B. TTM operating cash flow/common equity at 0.12 vs. 5-year average at -0.15. MRQ total debt to assets at 0.14. Net institutional shares purchased over the current quarter at 6.5M, which is 7.90% of the company's 82.31M share float. Net insider purchases over the last six months at 3.61M, which is 4.38% of the company's share float. The stock is a short squeeze candidate, with a short float at 9.87% (equivalent to 10.05 days of average volume). It's been a rough couple of days for the stock, losing 9.24% over the last week.
3. NL Industries Inc. (NL): Synthetics Industry. Market cap of $620.42M. TTM operating cash flow/common equity at 0.12 vs. 5-year average at 0.03. MRQ total debt to assets at 0.10. Net institutional shares purchased over the current quarter at 140.6K, which is 2.21% of the company's 6.37M share float. Net insider purchases over the last six months at 52.89K, which is 0.83% of the company's share float. Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 3.92%, current ratio at 2, and quick ratio at 1.5. The stock is a short squeeze candidate, with a short float at 5.81% (equivalent to 7.07 days of average volume). It's been a rough couple of days for the stock, losing 25.48% over the last week.
4. Duncan Energy Partners LP (DEP): Oil & Gas Pipelines Industry. Market cap of $2.35B. TTM operating cash flow/common equity at 0.44 vs. 5-year average at 0.19. MRQ total debt to assets at 0.18. Net institutional shares purchased over the current quarter at 1.8M, which is 7.79% of the company's 23.10M share float. Net insider purchases over the last six months at 46.98K, which is 0.20% of the company's share float. The stock has gained 55.01% over the last year.
*Institutional data sourced from Fidelity, insider data sourced from Yahoo! Finance, operating cash flow/common equity data and total debt to assets data sourced from Screener.co, 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.
