Investing 101: Eight Breakout Stocks with Institutional Buying

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(List compiled by Becca Lipman. Institutional data sourced from Reuters. All other data from Finviz.)

Interested in breakout stocks? The following is a list of stocks that have seen a bullish 50-day SMA / 200-day SMA crossover over the last session. All stocks on our list have market caps above $300M.

When these two moving averages cross, it often represents a shift in investor sentiment. If the 50-day MA moves above the 200-day MA (bullish), it's called a "Golden Cross" signal.

In addition to the bullish crossover signals, all of these stocks have seen significant institutional buying over the current quarter. Indicating the think these companies have more value to price in. 

Want a further explanation for these terms? You got it:

Breakout stocks: If a stock's 50 day moving average crosses above its 200 day moving average, it is called a "Golden Cross." This is typically seen as a bullish signal. It is thought to be a significant favorable turning point, especially if the trend is confirmed by higher trading volume.

MA, or SMA, stands for the “moving average” price of the stock over the given time period (generally over the previous 20 days, 50 days or 200 days).

Institutional investors: 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.

Regular investors pay attention to what institutional investors do because 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.

Note: having a large portion of the stock owned by institutional investors is not always a positive attribute. For example, if a handful of institutional investors own a significant portion of a stock, if they were to all sell their shares at the same time, the share price would likely plummet. This might seem like an extreme scenario, but it has happened, as in the case of tech stocks during the tech bubble of the 1990s and early 2000s.

Also, investors should never blindly trust analysts or institutional investors or anybody else. Use information on institutional investing with other research before making any investing decisions.

Now that you're armed with information, how do you feel about the names below. Do you think they have more value to cash in? Use the data below as a starting point for your own anlaysis.

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List sorted by net shares purchased by institutional investors as a percentage of the share float.

1. Hyperdynamics Corporation (HDY): Oil & Gas Drilling & Exploration Industry. Market cap of $840.14M. Current price at $5.29. The 50-day MA is at $4.41 vs. the 200-day MA at $4.37. Net institutional shares purchased during the current quarter at 25.1M, representing 19.07% of the company's 131.60M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.46). The stock has had a couple of great days, gaining 6.55% over the last week.

2. Asbury Automotive Group, Inc. (ABG): Auto Dealerships Industry. Market cap of $677.45M. Current price at $21.34. The 50-day MA is at $17.59% vs. its 200-day SMA of 17.45. Net institutional shares purchased during the current quarter at 2.5M, representing 11.48% of the company's 21.77M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.86). The stock has had a couple of great days, gaining 5.53% over the last week.

3. Augusta Resource Corp. (AZC): Industrial Metals & Minerals Industry. Market cap of $709.77M. Current price at $4.97. The 50-day MA is at $4.55% vs. its 200-day SMA of 4.45. Net institutional shares purchased during the current quarter at 9.2M, representing 11.05% of the company's 83.27M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.11). It's been a rough couple of days for the stock, losing 6.75% over the last week.

4. Higher One Inc. (ONE): Business Services Industry. Market cap of $1.14B. Current price at $20.03. The 50-day MA is at $17.90% vs. its 200-day SMA of 17.71. Net institutional shares purchased during the current quarter at 2.1M, representing 6.94% of the company's 30.25M share float. The stock has had a good month, gaining 10.82%.

5. Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk. (TLK): Telecom Services Industry. Market cap of $17.52B. Current price at $34.41. The 50-day MA is at $33.77% vs. its 200-day SMA of 33.75. Net institutional shares purchased during the current quarter at 15.4M, representing 6.59% of the company's 233.72M share float. The stock has lost 0.57% over the last year.

6. Iridium Communications Inc. (IRDM): Communication Equipment Industry. Market cap of $617.62M. Current price at $8.59. The 50-day MA is at $8.57% vs. its 200-day SMA of 8.53. Net institutional shares purchased during the current quarter at 2.2M, representing 5.29% of the company's 41.59M share float. The stock has lost 16.68% over the last year.

7. Snyder's-Lance, Inc. (LNCE): Processed & Packaged Goods Industry. Market cap of $1.38B. Current price at $20.4. The 50-day MA is at $21.28% vs. its 200-day SMA of 21.02. Net institutional shares purchased during the current quarter at 1.3M, representing 2.96% of the company's 43.94M share float. The stock has lost 1.82% over the last year.

8. Natural Resource Partners LP (NRP): Industrial Metals & Minerals Industry. Market cap of $3.40B. Current price at $31.69. The 50-day MA is at $32.44% vs. its 200-day SMA of 32.37. Net institutional shares purchased during the current quarter at 1.6M, representing 2.9% of the company's 55.13M share float. It's been a rough couple of days for the stock, losing 6.97% over the last week.



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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