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Do you follow the buying trends of smart money institutional investors? We ran a screen with this idea in mind.

We began by screening for highly liquid stocks, with current ratios above 3. We then screened for stocks 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 in the future.

Finally, we screened for those stocks trading at steep discounts to even their most pessimistic analyst target prices. This may indicate that these stocks are trading below their fair value.

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

Tool provided by Kapitall (www.kapitall.com). More investing ideas on Kapitall Wire (wire.kapitall.com).

Do you think these stocks should be trading higher? Use this list as a starting point for your own analysis.

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

1. Amicus Therapeutics, Inc. (FOLD): Focuses on the discovery, development, and commercialization of orally-administered, small molecule drugs for the treatment of various human genetic diseases. Market cap at $217.99M, most recent closing price at $4.70. Current ratio at 6.49. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $6.00. This implies a current upside of 24.22% from current levels around $4.83. Net institutional purchases in the current quarter at 10.6M shares, which represents about 49.6% of the company's float of 21.37M shares.

2. OncoGenex Pharmaceuticals, Inc. (OGXI): Engages in the development and commercialization of new cancer therapies that address treatment resistance in cancer patients. Market cap at $207.19M, most recent closing price at $14.22. Current ratio at 3.83. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $17.00. This implies a current upside of 17.0% from current levels around $14.53. Net institutional purchases in the current quarter at 4.3M shares, which represents about 33.39% of the company's float of 12.88M shares.

3. KiOR, Inc. (KIOR): Focuses on operating as a renewable fuels company. Market cap at $775.1M, most recent closing price at $7.43. Current ratio at 5.4. Of the 8 analysts that have set a target price on the stock, the lowest price target stands at $9.00. This implies a current upside of 22.78% from current levels around $7.33. Net institutional purchases in the current quarter at 4.1M shares, which represents about 25.83% of the company's float of 15.87M shares.

4. Abiomed Inc. (ABMD): Engages in the research, development, and sale of medical devices that provide circulatory support to acute heart failure patients across the continuum of care in heart recovery. Market cap at $853.2M, most recent closing price at $21.60. Current ratio at 5.95. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $27.00. This implies a current upside of 16.38% from current levels around $23.20. Net institutional purchases in the current quarter at 6.1M shares, which represents about 18.08% of the company's float of 33.73M shares.

5. Procera Networks, Inc. (PKT): Provides network traffic awareness, analysis, and control solutions for broadband service providers. Market cap at $462.66M, most recent closing price at $23.91. Current ratio at 12.04. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $26.00. This implies a current upside of 15.50% from current levels around $22.51. Net institutional purchases in the current quarter at 2.5M shares, which represents about 14.29% of the company's float of 17.50M shares.

6. BroadSoft, Inc. (BSFT): Provides software that enables fixed-line, mobile, and cable service providers to deliver voice and multimedia services over Internet protocol (IP) based networks. Market cap at $1.08B, most recent closing price at $39.07. Current ratio at 3.95. Of the 10 analysts that have set a target price on the stock, the lowest price target stands at $31.00. This implies a current upside of 17.03% from current levels around $26.49. Net institutional purchases in the current quarter at 3.8M shares, which represents about 13.99% of the company's float of 27.16M shares.

7. Pan American Silver Corp. (PAAS): Engages in the exploration, development, extraction, processing, production, refining, reclamation, and operation of silver properties. Market cap at $2.37B, most recent closing price at $15.52. Current ratio at 5.49. Of the 13 analysts that have set a target price on the stock, the lowest price target stands at $17.50. This implies a current upside of 17.45% from current levels around $14.90. Net institutional purchases in the current quarter at 17.2M shares, which represents about 11.39% of the company's float of 150.97M shares.

*Institutional data sourced from Fidelity, target price data sourced from Thomson/First Call (via Yahoo! Finance), all other data sourced from Finviz.

Source: 7 Highly Liquid Hedge Fund Stock Picks Undervalued By Target Price