Investing 101: High Growth Stocks With Bullish Investor Sentiment

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(List compiled by Eben Esterhuizen, CFA)

If you're looking for high growth investing ideas, use the following list as a starting point for your own analysis. 

If you're new to investing, here's a summary of the key terms you need to understand to follow the analysis:

Projected Earnings Growth:

Projected earnings-per-share (EPS) is an educated guess about how much money a company can make in profits in the future. If analysts think that the EPS of a company will grow more than 20% over the next five years, it is considered a High Growth Stock.

Short Selling:

Short selling is an investment technique that allows an investor to make money when the value of a stock falls. Short sellers, however, lose money when the share price rises. And because share prices could rise to infinity, a reckless short position could lead to incredibly large losses.

Because short selling requires borrowing, an individual or institution must meet several requirements (including background checks) to engage in short selling. Thus, in general, short sellers are more sophisticated than the average investor.

Because short selling reflects a prediction that prices are going to fall, a relatively small short float indicates that fewer short sellers think that company has bad short-term prospects.

In general: When there is an INCREASE in short selling, short sellers seem to think the names will DROP in value. When there is a DECREASE in short selling, short sellers seem to think the names will RISE in value.

Institutional Buying:

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.

Now that you're familiar with the terminology, let's analyze the list:

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

1. Access a thorough description of all companies mentioned
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1. Western Refining Inc. (WNR): Operates as an independent crude oil refiner and marketer of refined products in Texas, Arizona, New Mexico, Utah, Colorado, and the Mid-Atlantic region. Wall Street analysts project the company's earnings per share to grow by 40.0% over the next five years. Net institutional purchases in the current quarter at 5.8M shares, which represents about 10.79% of the company's float of 53.73M shares. Shares shorted have decreased from 16.92M to 16.31M over the last month, a decrease which represents about 1.14% of the company's float of 53.73M shares

2. TiVo Inc. (TIVO): Provides technology and services for television solutions, including digital video recorders (DVRs) and connected televisions in the United States and internationally. Wall Street analysts project the company's earnings per share to grow by 40.0% over the next five years. Net institutional purchases in the current quarter at 11.9M shares, which represents about 10.9% of the company's float of 109.15M shares. Shares shorted have decreased from 19.52M to 17.68M over the last month, a decrease which represents about 1.69% of the company's float of 109.15M shares

3. IMAX Corporation (IMAX): Operates as an entertainment technology company worldwide. Wall Street analysts project the company's earnings per share to grow by 26.70% over the next five years. Net institutional purchases in the current quarter at 3.7M shares, which represents about 6.66% of the company's float of 55.52M shares. Shares shorted have decreased from 4.01M to 3.35M over the last month, a decrease which represents about 1.19% of the company's float of 55.52M shares

4. Renren Inc. American Depositary (RENN): Operates a social networking Internet platform in China. Wall Street analysts project the company's earnings per share to grow by 26.16% over the next five years. Net institutional purchases in the current quarter at 50.3M shares, which represents about 28.79% of the company's float of 174.71M shares. Shares shorted have decreased from 12.64M to 10.13M over the last month, a decrease which represents about 1.44% of the company's float of 174.71M shares

5. RealD Inc. (RLD): RealD Inc. licenses stereoscopic three-dimensional or 3D technologies internationally. Wall Street analysts project the company's earnings per share to grow by 28.75% over the next five years. Net institutional purchases in the current quarter at 9.2M shares, which represents about 22.58% of the company's float of 40.74M shares. Shares shorted have decreased from 8.70M to 8.04M over the last month, a decrease which represents about 1.62% of the company's float of 40.74M shares.



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

Referenced Stocks: IMAX , RENN , RLD , TIVO , WNR

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