Do you like to follow the buying and selling trends of smart money investors? If so, we ran a screen just for you.
We began by screening for stocks paying dividend yields above 2% and sustainable payout ratios below 50%. Then we screened for those that appear undervalued relative to earnings growth, with PEG below 1.
Finally, we 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 hedge funds are 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. GameStop Corp. (GME): Operates as a retailer of video game products and personal computer (PC) entertainment software. Market cap at $2.16B, most recent closing price at $16.57. Dividend yield at 3.58%, payout ratio at 6.20%. PEG at 0.74. Net institutional purchases in the current quarter at 19.6M shares, which represents about 15.3% of the company's float of 128.09M shares.
2. Booz Allen Hamilton Inc. (BAH): Provides professional services primarily to US government agencies in the defense, security, and civil sectors, as well as to corporations, institutions, and not-for-profit organizations. Market cap at $2.24B, most recent closing price at $16.92. Dividend yield at 2.11%, payout ratio at 4.96%. PEG at 0.93. Net institutional purchases in the current quarter at 2.2M shares, which represents about 7.77% of the company's float of 28.31M shares.
3. TESSCO Technologies Inc. (TESS): Provides integrated product and supply chain solutions to support the construction, operation, and use of mobility and data wireless systems. Market cap at $169.38M, most recent closing price at $21.12. Dividend yield at 3.42%, payout ratio at 26.36%. PEG at 0.69. Net institutional purchases in the current quarter at 289.1K shares, which represents about 5.4% of the company's float of 5.35M shares.
*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.