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Analysts follow the buying trends of “smart money” institutional investors, such as hedge fund and mutual fund managers, because they spend more time analyzing companies and have more information about them than most investors.

We ran a screen on high growth companies, with five-year projected EPS growth over 20%. We screened for those that are also highly profitable, beating their industry peers on gross, operating and pretax margins. Finally, we screened for those companies seeing significant net institutional buying over the current quarter.

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 the smart money is calling it right on these names? Use this list as a starting point for your own analysis.

List sorted by net institutional purchases as a percent of share float.

1. AeroVironment, Inc. (AVAV): Aerospace/Defense Products and Services Industry. Market cap of $565.62M. Projected five-year EPS growth at 28.50%. TTM gross margin at 44.37% vs. industry gross margin at 26.05%. TTM operating margin at 12.31% vs. industry operating margin at 11.94%. TTM pretax margin at 11.70% vs. industry pretax margin at 7.44%. Net institutional shares purchased over the current quarter at 1.9M, which is 11.52% of the company's 16.49M share float. The stock is a short squeeze candidate, with a short float at 15.09% (equivalent to 8.07 days of average volume). It has been a rough couple of days for the stock, losing 5.14% over the last week.

2. CEVA Inc. (CEVA): Semiconductor Industry. Market cap of $570.48M. Projected five-year EPS growth at 29.59%. TTM gross margin at 93.53% vs. industry gross margin at 60.88%. TTM operating margin at 28.17% vs. industry operating margin at 26.78%. TTM pretax margin at 32.42% vs. industry pretax margin at 26.66%. Net institutional shares purchased over the current quarter at 2.3M, which is 10.65% of the company's 21.59M share float. The stock is a short squeeze candidate, with a short float at 8.69% (equivalent to 6.72 days of average volume). It has been a rough couple of days for the stock, losing 11.02% over the last week.

3. Baytex Energy Corp. (BTE): Independent Oil and Gas Industry. Market cap of $5.50B. Projected five-year EPS growth at 26.40%. TTM gross margin at 54.0% vs. industry gross margin at 32.90%. TTM operating margin at 21.76% vs. industry operating margin at 15.05%. TTM pretax margin at 21.71% vs. industry pretax margin at 15.76%. Net institutional shares purchased over the current quarter at 6.8M, which is 5.95% of the company's 114.38M share float. It has been a rough couple of days for the stock, losing 9.15% over the last week.

4. Lululemon Athletica Inc. (LULU): Textile Clothing Industry. Market cap of $3.23B. Projected five-year EPS growth at 25.74%. TTM gross margin at 59.92% vs. industry gross margin at 53.78%. TTM operating margin at 26.28% vs. industry operating margin at 16.03%. TTM pretax margin at 26.73% vs. industry pretax margin at 15.01%. Net institutional shares purchased over the current quarter at 4.8M, which is 5.94% of the company's 80.79M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.58). The stock has performed poorly over the last month, losing 28.36%.

5. Dice Holdings, Inc. (DHX): Staffing and Outsourcing Services Industry. Market cap of $610.30M. Projected five-year EPS growth at 28.80%. TTM gross margin at 92.64% vs. industry gross margin at 68.06%. TTM operating margin at 29.23% vs. industry operating margin at 24.64%. TTM pretax margin at 25.14% vs. industry pretax margin at 14.69%. Net institutional shares purchased over the current quarter at 2.4M, which is 4.95% of the company's 48.48M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.39). It has been a rough couple of days for the stock, losing 14.81% over the last week.

6. DG FastChannel, Inc. (DGIT): Business Services Industry. Market cap of $490.90M. Projected five-year EPS growth at 22.60%. TTM gross margin at 67.07% vs. industry gross margin at 59.91%. TTM operating margin at 33.24% vs. industry operating margin at 18.31%. TTM pretax margin at 29.95% vs. industry pretax margin at 19.07%. Net institutional shares purchased over the current quarter at 1.2M, which is 4.75% of the company's 25.28M share float. The stock is a short squeeze candidate, with a short float at 14.15% (equivalent to eight days of average volume). It has been a rough couple of days for the stock, losing 15.65% over the last week.

*Profitability and 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.

Source: 6 Highly Profitable, High Growth Stocks Snapped Up By Smart Money