Analysts follow the buying trends of institutional investors such as hedge funds because they have access to sophisticated research and they have a lot of experience in choosing investments.
We ran a screen on dividend stocks paying sustainable payout ratios below 50% for those rallying above their 20-day, 50-day, and 200-day moving averages. We screened these stocks for those seeing significant net institutional purchases over 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. (To access a complete analysis of this list's recent performance, click here.)
Do you think hedge funds are making smart bets on these stocks? Use this list as a starting-off point for your own analysis.
List sorted by net institutional purchases as a percent of share float.
1. Weight Watchers International, Inc. (WTW): Provides weight management services worldwide. Market cap of $4.37B. Dividend yield at 1.18%, payout ratio at 20.28%. The stock is currently trading at 10.11% above its 20-Day SMA, 4.57% above its 50-Day SMA, and 0.30% above its 200-Day SMA. Net institutional shares purchased over the current quarter at 5.2M, which is 14.82% of the company's 35.09M share float. The stock has gained 86.19% over the last year.
2. Fundtech Ltd. (FNDT): Provides end-to-end financial transaction processing software solutions for financial institutions in Israel and internationally. Market cap of $359.82M. Dividend yield at 1.73%, payout ratio at 11.39%. The stock is currently trading at 4.07% above its 20-Day SMA, 21.94% above its 50-Day SMA, and 26.44% above its 200-Day SMA. Net institutional shares purchased over the current quarter at 705.0K, which is 13.18% of the company's 5.35M share float. The stock has had a good month, gaining 38.95%.
3. Motorola Solutions, Inc. (MSI): Provides business and mission critical communication products and services for enterprise and government customers worldwide. Market cap of $14.97B. Dividend yield at 2.02%, payout ratio at 11.85%. The stock is currently trading at 4.65% above its 20-Day SMA, 7.65% above its 50-Day SMA, and 5.65% above its 200-Day SMA. Net institutional shares purchased over the current quarter at 34.1M, which is 12.20% of the company's 279.46M share float. The stock has gained 29.07% over the last year.
4. Primoris Services Corporation (PRIM): A specialty contractor and infrastructure company, provides a range of construction, fabrication, maintenance, replacement, water and wastewater, and product engineering services. Market cap of $558.09M. Dividend yield at 1.10%, payout ratio at 10.21%. The stock is currently trading at 7.74% above its 20-Day SMA, 6.79% above its 50-Day SMA, and 7.44% above its 200-Day SMA. Net institutional shares purchased over the current quarter at 2.1M, which is 8.76% of the company's 23.98M share float. The stock is a short-squeeze candidate, with a short float at 6.86% (equivalent to 11.12 days of average volume). The stock has gained 54.6% over the last year.
5. AmTrust Financial Services, Inc. (AFSI): Operates as a multinational specialty property and casualty insurance company in the United States and internationally. Market cap of $1.33B. Dividend yield at 1.63%, payout ratio at 11.0%. The stock is currently trading at 1.80% above its 20-Day SMA, 1.03% above its 50-Day SMA, and 10.97% above its 200-Day SMA. Net institutional shares purchased over the current quarter at 1.4M, which is 7.92% of the company's 17.68M share float. Might be undervalued at current levels, with a PEG ratio at 0.63, and P/FCF ratio at 9.68. The stock is a short-squeeze candidate, with a short float at 12.38% (equivalent to 11.97 days of average volume). The stock has gained 47.07% over the last year.
6. The Sherwin-Williams Company (SHW): Engages in the development, manufacture, distribution, and sale of paints, coatings, and related products primarily in North and South America, the Caribbean region, Europe, and Asia. Market cap of $8.46B. Dividend yield at 1.83%, payout ratio at 31.62%. The stock is currently trading at 7.70% above its 20-Day SMA, 9.15% above its 50-Day SMA, and 0.42% above its 200-Day SMA. Net institutional shares purchased over the current quarter at 4.7M, which is 5.35% of the company's 87.93M share float. The stock has had a couple of great days, gaining 7.16% over the last week.
7. FXCM Inc (FXCM): Provides online foreign exchange (FX) trading and related services to retail and institutional customers Worldwide. Market cap of $230.01M. Dividend yield at 1.77%, payout ratio at 49.47%. The stock is currently trading at 2.70% above its 20-Day SMA, 16.55% above its 50-Day SMA, and 15.41% above its 200-Day SMA. Net institutional shares purchased over the current quarter at 608.9K, which is 4.26% of the company's 14.28M share float. The stock is a short squeeze candidate, with a short float at 28.66% (equivalent to 16.86 days of average volume). The stock has had a good month, gaining 15.88%.
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.
