Hedge Funds are Buying Up These 9 Stocks Trading Below Target Price

Hedge Funds are Buying Up These 9 Stocks Trading Below Target Price

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We ran a screen of all stocks with market caps above $50 million trading below their analyst price. Analyst target prices can be very useful guides for investors. The target price is a price level set by analysts that, based on their data and estimates, represents their predictions for that company in the upcoming year. When a company’s current market price is deeply lagging to the target price, it may signal that the company has more value to price in (the stock price may rise).

We explore this idea by forming a universe of companies that are currently undervalued to target price. All stocks have a minimum of 5 analysts ratings. And because analysts often have different opinions and tend to be overly optimistic, we use the lowest analyst target price.

Institutional Buying for Extra Confidence

We then screened for institutional buying. Institutional buyers are simply those with assets under management over $100 million.  These include banks, insurance companies, hedge funds, etc. Their market power is considerable, not least because when they move large quantities of cash into and out of stocks it influences decisions made by other investors.

Main Street investors often try to mimic these large intuitional traders knowing that a professional with access to sophisticated market analysis would not sink several millions into a stock if they were expecting it to crash and burn. Similarly, they would not sell large blocks of shares if they expected a rally.

Business Section: Investing Ideas

All the stocks listed below have a potential upside of at least 10% to target price and institutional buying that represents at least 5% of share float. List Average 1-Year Return: 22%.

What do you think? Is a rally in store for these stocks, or have these analyst simply got their ratings wrong here?

Interactive chart: All the stocks on the list have an average strong buy rating from analysts.

1. The KEYW Holding Corporation (KEYW, Earnings, Analysts, Financials): Provides mission-critical cybersecurity and cyber superiority solutions to defense, intelligence, and national security agencies in the United States. Market cap at $427.68M, most recent closing price at $12.23. Of the 7 analysts that have set a target price on the stock, the lowest price target stands at $15. This implies a potential upside of 20.96% from current levels around $12.4. Net institutional purchases in the current quarter at 7.0M shares, which represents about 22.76% of the company’s float of 30.76M shares.

 

2. Ligand Pharmaceuticals Incorporated (LGND, Earnings, Analysts, Financials): Operates as a biotechnology company. Market cap at $403.79M, most recent closing price at $20.25. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $23. This implies a potential upside of 18.67% from current levels around $19.38. Net institutional purchases in the current quarter at 1.6M shares, which represents about 12.5% of the company’s float of 12.80M shares.

 

3. MAP Pharmaceuticals, Inc. (MAPP, Earnings, Analysts, Financials): Focuses on the development and commercialization of inhalation therapies for patients suffering from migraine. Market cap at $561.11M, most recent closing price at $15.90. Of the 7 analysts that have set a target price on the stock, the lowest price target stands at $19. This implies a potential upside of 19.27% from current levels around $15.93. Net institutional purchases in the current quarter at 4.0M shares, which represents about 13.46% of the company’s float of 29.72M shares.

 

4. OraSure Technologies Inc. (OSUR, Earnings, Analysts, Financials): Develops, manufactures, markets, and sells oral fluid diagnostic products and specimen collection devices in the United States and internationally. Market cap at $397.32M, most recent closing price at $7.19. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $9. This implies a potential upside of 24.13% from current levels around $7.25. Net institutional purchases in the current quarter at 6.3M shares, which represents about 12.99% of the company’s float of 48.51M shares.

 

5. RPX Corporation (RPXC, Earnings, Analysts, Financials): Provides patent risk management solutions in the United States, Europe, and Asia. Market cap at $496.3M, most recent closing price at $9.76. Of the 7 analysts that have set a target price on the stock, the lowest price target stands at $13. This implies a potential upside of 33.06% from current levels around $9.77. Net institutional purchases in the current quarter at 1.9M shares, which represents about 7.4% of the company’s float of 25.66M shares.

 

6. inContact, Inc. (SAAS, Earnings, Analysts, Financials): Provides cloud computing contact center services and network connectivity in the United States. Market cap at $275.67M, most recent closing price at $5.22. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $6.5. This implies a potential upside of 24.76% from current levels around $5.21. Net institutional purchases in the current quarter at 9.3M shares, which represents about 21.67% of the company’s float of 42.91M shares.

 

7. Solta Medical, Inc. (SLTM, Earnings, Analysts, Financials): Designs, develops, manufactures, and markets energy-based medical device systems for aesthetic applications. Market cap at $180.97M, most recent closing price at $2.64. Of the 8 analysts that have set a target price on the stock, the lowest price target stands at $3.75. This implies a potential upside of 34.89% from current levels around $2.78. Net institutional purchases in the current quarter at 6.2M shares, which represents about 30.53% of the company’s float of 20.31M shares.

 

8. Web.com Group, Inc. (WWWW, Earnings, Analysts, Financials): Provides Internet services and online marketing solutions for small-to-medium sized businesses to build and maintain an online presence. Market cap at $774.29M, most recent closing price at $15.76. Of the 11 analysts that have set a target price on the stock, the lowest price target stands at $20. This implies a potential upside of 26.02% from current levels around $15.87. Net institutional purchases in the current quarter at 2.0M shares, which represents about 5.4% of the company’s float of 37.05M shares.

 

9. Fusion-io, Inc (FIO, Earnings, Analysts, Financials): Focuses on the development, marketing, and sale of storage memory platforms for data decentralization. Market cap at $1.99B, most recent closing price at $20.80. Of the 17 analysts that have set a target price on the stock, the lowest price target stands at $23. This implies a potential upside of 15.40% from current levels around $19.93. Net institutional purchases in the current quarter at 7.3M shares, which represents about 9.45% of the company’s float of 77.28M shares.

(List compiled by Rebecca Lipman)

 

 

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5 Responses to “Hedge Funds are Buying Up These 9 Stocks Trading Below Target Price”

  1. FxCk says:

    Some of the information in this article does not appear to be accurate.

  2. Gardener says:

    Main Street investors often try to mimic these large intuitional traders knowing that a professional with access to sophisticated market analysis would not sink several millions into a stock if they were expecting it to crash and burn. Similarly, they would not sell large blocks of shares if they expected a rally.

  3. Thanks for useful and beneficial publish, obviously in your web page everything is outstanding. if you publish useful feedback on weblogs there is always the chance that real people will click through

  4. Anderson says:

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  5. Anderson says:

    Thank you for the great information Phone Detective

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