On Jim Cramer's show Mad Money, you seldom hear callers asking him whether they should go "long" on some terrible stock with poor fundamentals from an underperforming sector. Novice retail investors are clinging to stocks that are buried in liabilities, such as Delta Air Lines (DAL), United Air Lines (UAL) and JetBlue (JBLU), for no particular reason. If I had to use a ten-foot pole and touch the airline industry, then with my top-down analysis I would pick the best one of them all, Southwest Airlines (LUV).
Unless hedging energy positions with transportation stocks, I see no other reason for an investor to go long on airlines with crude above $75/barrel. Why be at the mercy of jet fuel prices when there's an evident global food shortage, with a robust, increasing, continuous demand for companies like Potash (POT) and its latest spin-off, Intrepid Potash Inc. (IPI). During periods of slow economic growth, chase stocks that generate their cash from highly demanded commodities and that are easily solvent.
There's an old adage that says, "You want to get rich, do what the rich does!" I say, "You want to make money in the stock market, buy what financial institutions are buying," don't try to reinvent the wheel. I picked 20 companies with ROIs of more than 20% and an institiutional ownership of more than 90%. These are the stocks that mutual funds and life insurance companies buy and sell frequently.
25 Stocks With More Than 90% Institutional Ownership And Over 20% ROI
|Company||Ticker||ROI||Institutional Ownership||Dividend Yield|
|Advanced Auto Parts||(AAP)||23.89%||99.20%||0.40%|
|Aruba Networks, Inc.||(ARUN)||27.02%||98.96%||N/A|
|Bed Bath & Beyond Inc.||(BBBY)||20.72%||90.74%||N/A|
|Big Lots, Inc.||(BIG)||20.84%||95%||N/A|
|Cognizant Technology Solutions||(CTSH)||23.12%||94.15%||N/A|
|Deckers Outdoor||(DECK) ||24.52%||98.89%||N/A|
|Dollar Tree, Inc.||(DLTR)||24.09%||90.76%||N/A|
|The Dun & Bradstreet||(DNB)||43.00%||90.73%||2.25%|
|Express Scripts, Inc.||(ESRX)||21.46%||97.93%||N/A|
|Joy Global Inc.||(JOYG)||21.26%||90.68%||1.01%|
|Linear Technology Corp.||(LLTC)||47.28%||93.48%||3.25%|
|Mead Johnson Nutrition Co.||(MJN)||37.07%||93.80%||1.39%|
|Ross Stores, Inc.||(ROST)||33.94%||95.11%||N/A|
|The TJX Companies, Inc.||(TJX)||27.39%||94.17%||1.32%|
|Varian Medical Systems, Inc.||(VAR)||26.01%||93.49%||N/A|
|WABCO Holdings Inc.||(WBC)||32.43%||95.38%||N/A|