Bullish Trinity: Insiders and Hedge Funds Love 4 Short Covered Stocks

Bullish Trinity: Insiders and Hedge Funds Love 4 Short Covered Stocks

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Listen closely and you can hear the bulls stampeding. It's not too often that more than one stock meets the "bullish trinity" requirements set by Kapitall. This means the following criteria have been met:

1. Insider Buying -If anyone knows what is going on with a company, it has to be the people that work there. But when insiders start to buy up shares of their company, there’s really only one good explanation: They think the share price is undervalued. If they're buying, then insiders are confident there is more upside potential, and might have a hunch their stock is going to rally. Of course, these predictions aren’t always realized, but it’s a strong indicator for outsiders to go by.

We screened for names showing net insider buying in the current quarter in excess of 1% share float. 

2. Institutional Buying - Insider activity alone isn't enough to actually shift market prices. This day and age it's the work of hedge funds that make it their daily business to buy, sell and move millions of shares every day that really get share prices moving. But hedge funds pay attention to insiders too, so insider activity can set a spark that puts institutional buying (or selling) in action. 

Like insiders, institutional sales are closely watched and reported. Here we screen for names showing significant net institutional buying in the current quarter, representing at least 5% of share float.

3. Short Covering - We screened for companies with a recent significant decreases in shares shorted. This signals optimism, or rather a lack of pessimism, from short sellers – a group of investors who benefit when share price falls. 

We screened for names showing short covering month over month in excess of 1.5% share float. 

Four stocks made the final list. As this interactive (press play) 1-year return chart shows, their performance hasn't exactly been stellar (average return: -10%). Could all this bullishness signal that a rebound is imminent?

1. Navistar International Corporation (NAV, Earnings, Analysts, Financials): Through its subsidiaries, manufactures and sells commercial and military trucks, buses, diesel engines, recreational vehicles (RVs), and chassis, as well as provides service parts for trucks and trailers. Market cap at $2.73B, most recent closing price at $34.10.

Net institutional purchases in the current quarter at 15.4M shares, which represents about 29.82% of the company's float of 51.64M shares.

Shares shorted have decreased from 15.99M to 12.76M over the last month, a decrease which represents about 6.25% of the company's float of 51.64M shares. Days to cover ratio at 6.04 days.

Over the last six months, insiders were net buyers of 3,353,100 shares, which represents about 6.49% of the company's 51.64M share float.

2. Superconductor Technologies, Inc. (SCON, Earnings, Analysts, Financials): Engaged in developing and commercializing high temperature superconductor (HTS) materials and related technologies. Market cap at $11.96M, most recent closing price at $2.84.

Net institutional purchases in the current quarter at 222.9K shares, which represents about 5.7% of the company's float of 3.91M shares.

Shares shorted have decreased from 1.69M to 159.08K over the last month, a decrease which represents about 39.15% of the company's float of 3.91M shares.

Over the last six months, insiders were net buyers of 1,333,330 shares, which represents about 34.1% of the company's 3.91M share float.

3. Vistaprint N.V. (VPRT, Earnings, Analysts, Financials): Operates as an online provider of marketing products and services to micro businesses worldwide. Market cap at $1.33B, most recent closing price at $39.61.

Net institutional purchases in the current quarter at 1.8M shares, which represents about 8.57% of the company's float of 21.00M shares.

Shares shorted have decreased from 8.18M to 7.77M over the last month, a decrease which represents about 1.95% of the company's float of 21.00M shares. Days to cover ratio at 18.52 days.

Over the last six months, insiders were net buyers of 391,580 shares, which represents about 1.86% of the company's 21.00M share float.

4. XOMA Corporation (XOMA, Earnings, Analysts, Financials): Engages in the discovery, development, and manufacture of therapeutic antibodies to treat inflammatory, autoimmune, infectious, and oncological diseases. Market cap at $292.46M, most recent closing price at $3.53.

Net institutional purchases in the current quarter at 9.9M shares, which represents about 20.45% of the company's float of 48.40M shares.

Shares shorted have decreased from 7.76M to 6.25M over the last month, a decrease which represents about 3.12% of the company's float of 48.40M shares. Days to cover ratio at 12.84 days.

Over the last six months, insiders were net buyers of 4,722,670 shares, which represents about 9.76% of the company's 48.40M share float.
 

(List compiled by Rebecca Lipman)

 

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