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Do you like to follow buying trends from smart money institutional investors? We ran a screen with that idea in mind.

We began by screening for stocks outperforming the market over the last quarter, with quarterly performance above 10%.

To refine the list, we collected data on annual financial statements, and only focused on companies that have reported rising gross profit margins over the last four years (based on annual filings). For each stock, we describe the relevant time interval and change in gross margin.

We then screened for those with bullish sentiment from institutional investors, with significant net institutional purchases over the last quarter representing at least 5% of share float. This indicates that institutional investors such as hedge fund managers and mutual fund managers expect these names to outperform into the future.

For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.

Tool provided by Kapitall (kapitall.com).

Do you think these companies will continue to outperform like hedge funds expect? Use this list as a starting point for your own analysis.

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

1. Boston Beer Co. Inc. (NYSE:SAM): Produces and sells alcohol beverages primarily in the United States, Canada, Europe, Israel, the Caribbean, the Pacific Rim, and Mexico. Market cap at $1.43B, most recent closing price at $111.11. Performance over the last quarter at 16.38%. Diluted normalized EPS increased from 0.63 to 2.21 during the first time interval (52 weeks ending 2009-12-26 vs. 52 weeks ending 2008-12-27). For the second time interval, diluted normalized EPS increased from 2.21 to 3.54 (52 weeks ending 2010-12-25 vs. 52 weeks ending 2009-12-26). And for the last time interval, the EPS increased from 3.54 to 3.89 (52 weeks ending 2011-12-31 vs. 52 weeks ending 2010-12-25). Net institutional purchases in the current quarter at 1.3M shares, which represents about 15.59% of the company's float of 8.34M shares.

2. American Tower Corporation (NYSE:AMT): Operates as a wireless and broadcast communications infrastructure company. Market cap at $26.52B, most recent closing price at $67.20. Performance over the last quarter at 10.03%. Diluted normalized EPS increased from 0.6 to 0.63 during the first time interval (12 months ending 2009-12-31 vs. 12 months ending 2008-12-31). For the second time interval, diluted normalized EPS increased from 0.63 to 0.95 (12 months ending 2010-12-31 vs. 12 months ending 2009-12-31). And for the last time interval, the EPS increased from 0.95 to 5.39 (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31). Net institutional purchases in the current quarter at 57.1M shares, which represents about 14.48% of the company's float of 394.29M shares.

3. Sally Beauty Holdings Inc. (NYSE:SBH): Engages in the distribution and retail of professional beauty supplies. Market cap at $4.99B, most recent closing price at $26.67. Performance over the last quarter at 13.65%. Diluted normalized EPS increased from 0.42 to 0.54 during the first time interval (12 months ending 2009-09-30 vs. 12 months ending 2008-09-30). For the second time interval, diluted normalized EPS increased from 0.54 to 0.78 (12 months ending 2010-09-30 vs. 12 months ending 2009-09-30). And for the last time interval, the EPS increased from 0.78 to 1.14 (12 months ending 2011-09-30 vs. 12 months ending 2010-09-30). Net institutional purchases in the current quarter at 18.2M shares, which represents about 12.06% of the company's float of 150.89M shares.

4. Ancestry.com Inc. (NASDAQ:ACOM): Operates as an online resource for family history for subscribers worldwide. Market cap at $1.11B, most recent closing price at $26.10. Performance over the last quarter at 28.93%. Diluted normalized EPS increased from 0.06 to 0.51 during the first time interval (12 months ending 2009-12-31 vs. 12 months ending 2008-12-31). For the second time interval, diluted normalized EPS increased from 0.51 to 0.76 (12 months ending 2010-12-31 vs. 12 months ending 2009-12-31). And for the last time interval, the EPS increased from 0.76 to 1.29 (12 months ending 2011-12-31 vs. 12 months ending 2010-12-31). Net institutional purchases in the current quarter at 2.7M shares, which represents about 8.99% of the company's float of 30.03M shares.

5. Dollar General Corporation (NYSE:DG): Operates as a discount retailer of general merchandise in the southern, southwestern, midwestern, and eastern United States. Market cap at $16.8B, most recent closing price at $50.55. Performance over the last quarter at 17.54%. Diluted normalized EPS increased from 0.4 to 1.17 during the first time interval (52 weeks ending 2010-01-29 vs. 52 weeks ending 2009-01-30). For the second time interval, diluted normalized EPS increased from 1.17 to 1.85 (52 weeks ending 2011-01-28 vs. 52 weeks ending 2010-01-29). And for the last time interval, the EPS increased from 1.85 to 2.33 (52 weeks ending 2012-02-03 vs. 52 weeks ending 2011-01-28). Net institutional purchases in the current quarter at 18.4M shares, which represents about 8.38% of the company's float of 219.44M shares.

*EPS data sourced from Yahoo! Finance, all other data sourced from Finviz.

Source: 5 Outperforming Hedge Fund Stock Picks With Rising Profits