Consumer Spending May Be Low, But Hedge Funds Love These Retail Stocks

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(List compiled by Becca Lipman. Institutional spending data sourced from Fidelity, all other data from Finviz.)

The US economy grew by 1% this quarter, up from the previous quarter's 0,4%. All the same, the economy is growing at a worse-than-expected rate...

According to Bloomberg, "confidence among U.S. consumers dropped in August to the lowest level since November 2008," citing the Thomson Reuters/University of Michigan index of consumer sentiment, which fell to 55.7 this month from 63.7 in July.

Contributing factors to despair and pessimism facing consumers include fears of inflation, loss of confidence in the government's ability to fix the economic slump, unemployment, concerns over the global economy and market volatility following the downgrade.

But there's always a silver lining, and this time it's a small 0.4% increase in consumer spending. This exceeded analyst expectations of 0.1%.

This figure is something to cheer over: Consumer spending represents 70% of the nations GDD, thus any increases spells good news for a staggering economy. Business spending is also up9.9%, better than the estimated 6.3%.

"While sentiment has deteriorated, data such as industrial production, retail sales and employment suggest the economy could avoid an outright contraction," reports MSNBC.  

While it's certain that consumer sentiment is still very low, even one of the lowest levels recorded since 2008, it's also certain that some level of spending will continue.

Below we list consumer stocks that have been experiencing significant levels of institutional buying during the current quarter. Big money mangers thing these stocks can manage the downturn - do you?

Use the list below as a staring-off point in your own analysis. 

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Data sorted by institutional buying as a percentage of share float.

1. Verso Paper Corp. (VRS):
Paper & Paper Products Industry. Market cap of $103.15M. Net institutional purchases over the current quarter at 3.8M, which is 23.41% of the company's 16.23M share float. The stock is currently stuck in a downtrend, trading -7.73% below its SMA20, -21.71% below its SMA50, and -48.5% below its SMA200. The stock has performed poorly over the last month, losing 21.91%.

2. Tesla Motors, Inc. (TSLA): Auto Manufacturers Industry. Market cap of $2.40B. Net institutional purchases over the current quarter at 11.0M, which is 23.08% of the company's 47.65M share float. The stock is a short squeeze candidate, with a short float at 34.35% (equivalent to 13.17 days of average volume). The stock has performed poorly over the last month, losing 16.39%.

3. China New Borun Corporation (BORN): Beverages Industry. Market cap of $105.49M. Net institutional purchases over the current quarter at 1.1M, which is 19.20% of the company's 5.73M share float. The stock is currently stuck in a downtrend, trading -11.22% below its SMA20, -24.61% below its SMA50, and -55.16% below its SMA200. The stock has performed poorly over the last month, losing 41.51%.

4. Coffee Holding Co.Inc. (JVA): Processed & Packaged Goods Industry. Market cap of $84.44M. Net institutional purchases over the current quarter at 579.7K, which is 18.88% of the company's 3.07M share float. After a solid performance over the last year, JVA has pulled back during recent sessions. The stock has performed poorly over the last month, losing 10.79%.

5. Sanderson Farms, Inc. (SAFM): Meat Products Industry. Market cap of $872.76M. Net institutional purchases over the current quarter at 3.0M, which is 18.35% of the company's 16.35M share float. The stock is a short squeeze candidate, with a short float at 28.09% (equivalent to 15.35 days of average volume). It's been a rough couple of days for the stock, losing 6.23% over the last week.

6. Visteon Corp. (VC): Auto Parts Industry. Market cap of $2.39B. Net institutional purchases over the current quarter at 8.8M, which is 17.51% of the company's 50.25M share float. The stock is currently stuck in a downtrend, trading -6.78% below its SMA20, -21.11% below its SMA50, and -26.72% below its SMA200. The stock has performed poorly over the last month, losing 28.64%.

7. The Hain Celestial Group, Inc. (HAIN): Processed & Packaged Goods Industry. Market cap of $1.34B. Net institutional purchases over the current quarter at 4.8M, which is 14.68% of the company's 32.70M share float. The stock is a short squeeze candidate, with a short float at 5.55% (equivalent to 5.85 days of average volume). The stock has had a couple of great days, gaining 5.18% over the last week.

8. General Motors Company (GM): Auto Manufacturers Industry. Market cap of $33.46B. Net institutional purchases over the current quarter at 104.4M, which is 13.71% of the company's 761.24M share float. The stock is currently stuck in a downtrend, trading -8.9% below its SMA20, -18.67% below its SMA50, and -28.94% below its SMA200. It's been a rough couple of days for the stock, losing 5.51% over the last week.

9. Douglas Dynamics, Inc. (PLOW): Auto Parts Industry. Market cap of $294.80M. Net institutional purchases over the current quarter at 2.7M, which is 13.45% of the company's 20.08M share float. The stock has gained 29.47% over the last year.

10. Imperial Sugar Co. (IPSU): Confectioners Industry. Market cap of $80.29M. Net institutional purchases over the current quarter at 1.5M, which is 12.84% of the company's 11.68M share float. The stock is currently stuck in a downtrend, trading -41.56% below its SMA20, -61.58% below its SMA50, and -53.86% below its SMA200. The stock has performed poorly over the last month, losing 70.4%.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks


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