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Stocks trading at low prices bear the risk of being a “value trap,” i.e. a stock suffering from bad sentiment but trading at seemingly attractive valuations. When looking at low-priced stocks, it helps to get a vote of confidence from the “big money” institutional investors.

With that idea in mind, we ran a screen on stocks trading under $3 for those with 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 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.


(Click to enlarge)

Do you think these stocks are poised to outperform? Use this list as a starting point for your own analysis.

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

1. Bluelinx Holdings Inc. (NYSE:BXC): Distributes building products in North America. Market cap of $61.46M. Price (as of market close 11/16) at $1.88. Net institutional shares purchased over the current quarter at 7.2M, which is 29.07% of the company's 24.77M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.2). The stock has had a couple of great days, gaining 9.3% over the last week.

2. Dynegy Inc. (NYSE:DYN): Engages in the production and sale of electric energy, capacity, and ancillary services in the United States. Market cap of $329.36M. Price (as of market close 11/16) at $2.69. Net institutional shares purchased over the current quarter at 22.3M, which is 27.85% of the company's 80.07M share float. The stock is currently stuck in a downtrend, trading 20.56% below its SMA20, 33.64% below its SMA50, and 48.75% below its SMA200. It's been a rough couple of days for the stock, losing 20.18% over the last week.

3. Parkervision Inc. (NASDAQ:PRKR): Engages in the design, development, and sale of proprietary radio frequency (RF) technologies and products for use in semiconductor circuits for wireless communication products. Market cap of $50.39M. Price (as of market close 11/16) at $1.01. Net institutional shares purchased over the current quarter at 10.6M, which is 25.34% of the company's 41.83M share float. The stock is a short squeeze candidate, with a short float at 9.53% (equivalent to 40.04 days of average volume). The stock has had a good month, gaining 13.48%.

4. Camelot Information Systems Inc. (NYSE:CIS): Provides enterprise application services and financial industry information technology (IT) services in the People's Republic of China. Market cap of $105.96M. Price (as of market close 11/16) at $2.36. Net institutional shares purchased over the current quarter at 6.4M, which is 23.33% of the company's 27.43M share float. It's been a rough couple of days for the stock, losing 15.11% over the last week.

5. The McClatchy Company (NYSE:MNI): Operates as a newspaper publisher in the United States. Market cap of $106.76M. Price (as of market close 11/16) at $1.25. Net institutional shares purchased over the current quarter at 10.8M, which is 22.14% of the company's 48.78M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 3.16). The stock is a short squeeze candidate, with a short float at 43.72% (equivalent to 46.17 days of average volume). The stock has performed poorly over the last month, losing 18.83%.

6. Orchid Cellmark Inc. (NASDAQ:ORCH): Provides human identity DNA testing services for forensic, family relationship, and security applications in the United States and the United Kingdom. Market cap of $81.08M. Price (as of market close 11/16) at $2.69. Net institutional shares purchased over the current quarter at 3.0M, which is 15.14% of the company's 19.82M share float. The stock has gained 74.68% over the last year.

7. Zogenix, Inc. (NASDAQ:ZGNX): Engages in the development and commercialization of products for the treatment of central nervous system disorders and pain. Market cap of $61.24M. Price (as of market close 11/16) at $1.80. Net institutional shares purchased over the current quarter at 5.8M, which is 15.0% of the company's 38.67M share float. It's been a rough couple of days for the stock, losing 10% over the last week.

8. Ramtron International Corp. (RMTR): Designs, develops, and markets specialized semiconductor memory, microcontroller, and integrated semiconductor solutions. Market cap of $58.43M. Price (as of market close 11/16) at $2.13. Net institutional shares purchased over the current quarter at 3.6M, which is 12.27% of the company's 29.34M share float. The stock has lost 44.09% over the last year.

9. GLG Life Tech Corporation (GLGL): Engages in the research and development, growing, refining, production, and distribution of stevia extract to the food and beverage industry worldwide. Market cap of $55.33M. Price (as of market close 11/16) at $1.67. Net institutional shares purchased over the current quarter at 3.4M, which is 12.07% of the company's 28.17M share float. It's been a rough couple of days for the stock, losing 23.04% over the last week.

10. Comstock Mining, Inc. (NYSEMKT:LODE): Operates as a precious metals mining company in North America. Market cap of $62.30M. Price (as of market close 11/16) at $2.45. Net institutional shares purchased over the current quarter at 2.4M, which is 11.29% of the company's 21.25M share float. The stock has had a couple of great days, gaining 23.12% over the last week.

11. Avino Silver & Gold Mines Ltd. (NYSEMKT:ASM): Engages in the exploration and development of mineral properties in Mexico and Canada. Market cap of $52.46M. Price (as of market close 11/16) at $1.95. Net institutional shares purchased over the current quarter at 2.9M, which is 11.03% of the company's 26.29M share float. The stock has gained 16.77% over the last year.

12. Hansen Medical, Inc. (NASDAQ:HNSN): Develops, manufactures, and markets medical robotics designed for accurate positioning, manipulation, and stable control of catheters and catheter-based technologies. Market cap of $118.02M. Price (as of market close 11/16) at $2.14. Net institutional shares purchased over the current quarter at 4.7M, which is 11.0% of the company's 42.72M share float. The stock is a short squeeze candidate, with a short float at 18.01% (equivalent to 9.97 days of average volume). The stock has performed poorly over the last month, losing 32.7%.

13. Savient Pharmaceuticals, Inc. (SVNT): Focuses on developing KRYSTEXXA, a biologic PEGylated uricase in the United States. Market cap of $182.25M. Price (as of market close 11/16) at $2.55. Net institutional shares purchased over the current quarter at 5.7M, which is 10.28% of the company's 55.46M share float. The stock is a short squeeze candidate, with a short float at 37.99% (equivalent to 15.81 days of average volume). It's been a rough couple of days for the stock, losing 14.43% over the last week.

14. MPG Office Trust, Inc. (NYSE:MPG-OLD): Engages in the ownership, management, acquisition, and development of office and real estate properties primarily in California. Market cap of $109.65M. Price (as of market close 11/16) at $2.15. Net institutional shares purchased over the current quarter at 4.3M, which is 10.18% of the company's 42.25M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.25). The stock is a short squeeze candidate, with a short float at 10.55% (equivalent to 15.23 days of average volume). It's been a rough couple of days for the stock, losing 7.73% over the last week.

15. Theratechnologies Inc. (THER): Engages in the discovery and development of therapeutic peptide products with a focus on growth-hormone releasing factor (GRF) peptides. Market cap of $166.12M. Price (as of market close 11/16) at $2.73. Net institutional shares purchased over the current quarter at 5.1M, which is 9.44% of the company's 54.02M share float. The stock is a short squeeze candidate, with a short float at 5.32% (equivalent to 80.58 days of average volume). The stock has performed poorly over the last month, losing 14.42%.

16. Lake Shore Gold Corp. (NYSEMKT:LSG): Engages in the acquisition, exploration, and development of gold properties in northern Ontario and Quebec of Canada, as well as in Mexico. Market cap of $653.62M. Price (as of market close 11/16) at $1.70. Net institutional shares purchased over the current quarter at 33.5M, which is 9.25% of the company's 361.98M share float. The stock has had a couple of great days, gaining 9.68% over the last week.

17. Midway Gold Corp. (NYSEMKT:MDW): Engages in the acquisition, exploration, and development of mineral properties in North America. Market cap of $245.62M. Price (as of market close 11/16) at $2.17. Net institutional shares purchased over the current quarter at 7.0M, which is 9.10% of the company's 76.94M share float. The stock is a short squeeze candidate, with a short float at 6.61% (equivalent to 6.7 days of average volume). The stock has gained 255.74% over the last year.

*Data from 11/15. Institutional data sourced from Fidelity, all other data sourced from Finviz.

Source: 17 Smart Money Stock Picks Trading Under $3