Investing 101: Downtrending Tech Stocks With Institutional Buying

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(Article by Becca Lipman. List compiled by Daniel Guttridge. Data sourced from Finviz. Price data collected Wed, Aug 31st.)

Do you enjoy the hunt for rebound stocks? If so, the following information may be of interest to you.

Today we focus on technology stocks with market caps over $300M. To find names that may be set for a rebound, we started with a universe of stocks signaling the "Death Cross," and then narrowed it down to stocks being bought up at significant levels by institutional investors over the current quarter.

Our final list is below.

For those less familiar with these data points, let's quickly review the key terms used above as well as their implications:

Death Cross: Opposite of the "Golden Cross," a "Death Cross" occurs when the 50-day moving average crosses BELOW the 200-day moving average. This is a serious signal of a downtrend.

Institutional investors are also known as "big money" investors or managers. They represent big pools of money such as investment banks, pension funds, mutual funds, hedge funds, endowment funds, etc. When they invest in stocks, they can invest hundreds of thousands of dollars or more at one time. These transactions, called "block trades," can have a significant effect on share prices.

Because institutional investors handle such large amounts of money, it is easy enough to assume that the big money managers know what they are doing -- or at the very least know more than the average investor. This is why these investors are also sometimes referred to as "smart money.”

If institutional investors start investing in a company, regular investors can assume that some of the most talented analysts and money managers expect the company's share prices to increase over time. The stocks on our list are experiencing significant investment from big money.

Market Capitalization (Market Cap): Market capitalization, commonly referred to as market cap, is the total market value of a company's outstanding shares. It can be thought of as a measure of company's size. It can be calculated by multiplying the number of shares by the current price of the shares. Companies with higher market cap are considered to have more trustworthy information because they have greater histories of profitability and data.

Hedge funds seem to think these downward trending names are selling at a discount and might rebound, do you? 

Analyze These Ideas (Tools Will Open In A New Window)

1. Access a thorough description of all companies mentioned
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3. Visualize annual returns for all stocks mentioned

1. Kenexa Corp. (KNXA): Business Software & Services Industry. Market cap of $556.69M. SMA50 at $24.05 vs. SMA200 at $24.45 (current price at $20.74). Net institutional shares purchased over the current quarter at 4.5M, which is 19.55% of the company's 23.02M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.61). The stock has had a couple of great days, gaining 6.85% over the last week, yet it has performed poorly over the last month, losing 21.66%.

2. Calix Inc. (CALX): Communication Equipment Industry. Market cap of $693.64M. SMA50 at $18.14 vs. SMA200 at $18.22 (current price at $14.50). Net institutional shares purchased over the current quarter at 4.5M, which is 14.64% of the company's 30.74M share float. The stock has had a couple of great days, gaining 12.93% over the last week, yet it has performed poorly over the last month, losing 17.04%.

3. Lattice Semiconductor Corporation (LSCC): Semiconductor Industry. Market cap of $677.74M. SMA50 at $5.95 vs. SMA200 at $6.03 (current price at $5.55). Net institutional shares purchased over the current quarter at 11.9M, which is 11.62% of the company's 102.38M share float. The stock has gained 38.41% over the last year.

4. Verint Systems Inc. (VRNT): Business Software & Services Industry. Market cap of $1.08B. SMA50 at $32.27 vs. SMA200 at $33.50 (current price at $28.39). Net institutional shares purchased over the current quarter at 2.2M, which is 11.36% of the company's 19.36M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.08). The stock is a short squeeze candidate, with a short float at 5.5% (equivalent to 5.03 days of average volume). The stock has had a couple of great days, gaining 6.45% over the last week, yet it has performed poorly over the last month, losing 14.35%.

5. Synchronoss Technologies, Inc. (SNCR): Application Software Industry. Market cap of $1.10B. SMA50 at $30.10 vs. SMA200 at $30.35 (current price at $28.33). Net institutional shares purchased over the current quarter at 2.5M, which is 10.41% of the company's 24.01M share float. The stock is a short squeeze candidate, with a short float at 10.82% (equivalent to 9.73 days of average volume). The stock has had a couple of great days, gaining 8.46% over the last week.

6. ManTech International Corporation (MANT): Security Software & Services Industry. Market cap of $1.38B. SMA50 at $40.56 vs. SMA200 at $41.72 (current price at $37.45). Net institutional shares purchased over the current quarter at 1.4M, which is 6.02% of the company's 23.27M share float. The stock is a short squeeze candidate, with a short float at 11.66% (equivalent to 11.45 days of average volume). The stock has gained 5.79% over the last year.

7. OYO Geospace Corp. (OYOG): Scientific & Technical Instruments Industry. Market cap of $452.88M. SMA50 at $89.86 vs. SMA200 at $91.81 (current price at $73.61). Net institutional shares purchased over the current quarter at 278.3K, which is 5.93% of the company's 4.69M share float. The stock has performed poorly over the last month, losing 29.48%.

8. IDT Corporation (IDT): Diversified Communication Services Industry. Market cap of $492.91M. SMA50 at $23.99 vs. SMA200 at $25.27 (current price at $21.61). Net institutional shares purchased over the current quarter at 676.3K, which is 4.33% of the company's 15.62M share float. The stock has had a couple of great days, gaining 7.2% over the last week, yet it has performed poorly over the last month, losing 11.44%.

9. Semtech Corp. (SMTC): Semiconductor Industry. Market cap of $1.41B. SMA50 at $23.76 vs. SMA200 at $24.37 (current price at $21.24). Net institutional shares purchased over the current quarter at 2.0M, which is 3.17% of the company's 63.03M share float. The stock has gained 30.12% over the last year.



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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