Looking for cheap stocks with big potential? For a look at potential bargains, we ran a screen on stocks trading under $5 for those that the “big money investors” believe in.
Short Sellers and Hedge Funds
Institutional investors like hedge fund managers and mutual fund managers have a lot of experience in choosing investments, and they have access to the most sophisticated research. If they’re buying a stock, it’s a signal to take a second look.
As for short sellers, they are also considered very knowledgeable due to the stringent requirements and background checks they are held to (this is because short selling involves large amounts of borrowing).
Investing Ideas
We ran a screen on stocks trading under $5 for those seeing bullish sentiment from both short sellers and institutions: decreases in shares shorted m/m as well as significant net institutional purchases over the current quarter.
In other words, short sellers have reduced bets that these companies will move lower, and institutional investors have increased their holdings (anticipating future gains)
Big money managers seem to think these stocks have upside potential. Do you think these stocks are bargains waiting to rally?
Use this list as a starting point for your own analysis.
List sorted by net institutional purchases as a percent of share float.
1. Affymetrix Inc. (AFFX, Earnings, Analysts, Financials): Engages in the development, manufacture, sale, and servicing of consumables and systems for genetic analysis in the life sciences and clinical healthcare markets. Current price at $4.91. Net institutional purchases in the current quarter at 8.5M shares, which represents about 14.7% of the company’s float of 57.87M shares. Shares shorted have decreased from 8.76M to 5.99M over the last month, a decrease that represents about 4.79% of the company’s float of 57.87M shares.
2. Sify Technologies Limited (SIFY, Earnings, Analysts, Financials): Provides enterprise and consumer Internet services primarily in India. Current price at $4.91. Net institutional purchases in the current quarter at 656.3K shares, which represents about 14.02% of the company’s float of 4.68M shares. Shares shorted have decreased from 3.68M to 3.33M over the last month, a decrease that represents about 7.48% of the company’s float of 4.68M shares
3. Central European Distribution Corp. (CEDC, Earnings, Analysts, Financials): Produces, imports, and distributes alcoholic beverages in Poland, Hungary, and the Russian Federation. Current price at $3.22. Net institutional purchases in the current quarter at 5.1M shares, which represents about 8.25% of the company’s float of 61.85M shares. Shares shorted have decreased from 10.50M to 9.81M over the last month, a decrease that represents about 1.12% of the company’s float of 61.85M shares.
4. Standard Pacific Corp. (SPF, Earnings, Analysts, Financials): Operates as a diversified builder of single-family attached and detached homes in the United States. Current price at $2.91. Net institutional purchases in the current quarter at 7.3M shares, which represents about 6.91% of the company’s float of 105.61M shares. Shares shorted have decreased from 19.16M to 18.01M over the last month, a decrease that represents about 1.09% of the company’s float of 105.61M shares.
5. Giant Interactive Group, Inc. (GA, Earnings, Analysts, Financials): Develops and operates online games in the People’s Republic of China. Current price at $4.12. Net institutional purchases in the current quarter at 5.0M shares, which represents about 5.55% of the company’s float of 90.17M shares. Shares shorted have decreased from 6.22M to 4.26M over the last month, a decrease that represents about 2.17% of the company’s float of 90.17M shares.
(Written by Alexander Crawford. Institutional data sourced from Fidelity, short data sourced from Yahoo! Finance.)
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Analyze These Ideas: Getting Started
- Read descriptions for all companies mentioned
- Access a performance overview for all stocks in the list
- Compare analyst ratings for the companies mentioned
- Compare analyst ratings to annual returns for stocks mentioned
- Real-Time Opinion: Scan the latest tweets about these companies (feed will open in a new window)
Dig Deeper: Access Company Snapshots, Charts, Filings
- Affymetrix Inc. (AFFX, Chart, Download SEC Filings)
- Sify Technologies Limited (SIFY, Chart, Download SEC Filings)
- Central European Distribution Corp. (CEDC, Chart, Download SEC Filings)
- Standard Pacific Corp. (SPF, Chart, Download SEC Filings)
- Giant Interactive Group, Inc. (GA, Chart, Download SEC Filings)
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