Rallying Stocks: Will Small Investors Miss Out on the Rally, Again?

By
A A A

(Written by Rebecca Lipman. List compiled by Eben Esterhuizen, CFA. Institutional data sourced from Fidelity, all other from Finviz.)

 If the $84 billion in withdrawals from US equity mutual funds this year is any indication, Americans aren’t too happy with the stock market – but could this backfire?

The $84 billion withdrawal, which was seen through Oct 11, tops the $83 billion of all last year, according to TrimTabs Investment Research. (Via The Street) But can a gain like Thursday’s +3.4% in the S&P500 index – a result of Wednesday’s euro zone summit – lure back the casual investor? According to some analysts, it’s a small step.

 

Missed Opportunities

But in the meantime, investors may be missing out on a market rebound. After all, investors wary of the stock market in periods of high volatility have missed out on market rallies before.

“Unfortunately, if the current rally has legs, it will once again mean individual investors have missed out on big gains, as they did in the big 2009 rally after the 2008 crash. The S&P 500 has soared 84 percent since March 2009,” reports The Street.

“So-called ‘mom and pop’ investors have typically been slow to respond to early signs of sustainable rallies in the past, and it’s likely they’ll do it again and miss out on some of the biggest gains,” adds Leon Mirochnik, a TrimTabs analyst.

 

Standing on the Sidelines

Investors are still wary of the debt crisis in Europe, a Chinese hard landing, and issues closer to home like high unemployment and directionless public policies. Corrections to these problems are likely to be a “slow, drawn-out process,” but markets can rebound in the interim.

What’s more, billions in cash have been withdrawn from the market and much of it sits waiting in the pockets of sideline investors. When the markets appear to be rising these investors will pour their money back in droves, causing markets to rally at breakneck speeds. In the case of this market rebound, there may be no looking back – and many will miss their opportunities.

 

Investing Ideas

If you’re interested in getting out of the sidelines sooner rather than later you may be looking for a good starting point. To help, we wanted to know which rallies have been correctly anticipated by big money managers.

For ideas we started with a universe of about 160 companies that are in rally mode–trading above their 20-day, 50-day and 200-day moving averages.

To refine the list, we collected data on institutional money flows, and identified the names that have seen significant institutional buying during the current quarter.

Institutional investors have timed these rallies perfectly, and they seem to think there’s more upside to be priced into these stocks–do you agree?

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

1. Access a thorough description of all companies mentioned
2. Compare analyst ratings for all stocks mentioned below
3. Visualize annual returns for all stocks mentioned

List sorted by distance from the 200-day simple moving average (SMA).

1. Silicon Motion Technology Corp. (SIMO): Operates as a fabless semiconductor company. The stock is currently 17.53% above its 20-day SMA, 34.01% above its 50-day SMA, and 64.69% above its 200-day SMA. Net institutional purchases in the current quarter at 3.2M shares, which represents about 11.79% of the company's float of 27.15M shares.

2. Pharmacyclics Inc. (PCYC): Operates as a clinical-stage biopharmaceutical company focusing on developing and commercializing small-molecule drugs for the treatment of immune mediated disease and cancer. The stock is currently 7.85% above its 20-day SMA, 13.56% above its 50-day SMA, and 57.33% above its 200-day SMA. Net institutional purchases in the current quarter at 8.2M shares, which represents about 15.21% of the company's float of 53.90M shares.

3. PriceSmart Inc. (PSMT): Operates warehouse clubs in the United States, Latin America, and the Caribbean. The stock is currently 8.50% above its 20-day SMA, 13.99% above its 50-day SMA, and 54.90% above its 200-day SMA. Net institutional purchases in the current quarter at 1.7M shares, which represents about 8.99% of the company's float of 18.92M shares.

4. Liquidity Services, Inc. (LQDT): Operates an online auction marketplace for wholesale, surplus, and salvage assets primarily in the U. The stock is currently 4.67% above its 20-day SMA, 10.61% above its 50-day SMA, and 48.86% above its 200-day SMA. Net institutional purchases in the current quarter at 2.2M shares, which represents about 11.09% of the company's float of 19.84M shares.

5. Select Comfort Corporation (SCSS): Develops, manufactures, markets, and supports adjustable-firmness beds and other sleep-related accessory products in the U. The stock is currently 23.34% above its 20-day SMA, 32.86% above its 50-day SMA, and 45.37% above its 200-day SMA. Net institutional purchases in the current quarter at 6.9M shares, which represents about 12.92% of the company's float of 53.39M shares.

6. Healthstream Inc. (HSTM): Provides Internet-based learning and research solutions in the United States. The stock is currently 11.37% above its 20-day SMA, 19.68% above its 50-day SMA, and 42.03% above its 200-day SMA. Net institutional purchases in the current quarter at 1.2M shares, which represents about 7.79% of the company's float of 15.41M shares.

7. Nu Skin Enterprises Inc. (NUS): Develops and distributes anti-aging personal care products and nutritional supplements worldwide. The stock is currently 15.76% above its 20-day SMA, 19.62% above its 50-day SMA, and 40.74% above its 200-day SMA. Net institutional purchases in the current quarter at 5.2M shares, which represents about 9.6% of the company's float of 54.15M shares.

8. Cheniere Energy, Inc. (LNG): Engages in the ownership and operation of liquefied natural gas (LNG) receiving terminals and natural gas pipelines in the Gulf Coast of the United States. The stock is currently 86.54% above its 20-day SMA, 75.24% above its 50-day SMA, and 40.67% above its 200-day SMA. Net institutional purchases in the current quarter at 14.5M shares, which represents about 23.77% of the company's float of 60.99M shares.

9. Caliper Life Sciences, Inc. (CALP): Develops and sells life sciences products and services primarily to pharmaceutical, biotechnology, and diagnostics companies, and government and other not-for-profit research institutions in the United States, Europe, and Asia. The stock is currently 0.21% above its 20-day SMA, 9.56% above its 50-day SMA, and 36.08% above its 200-day SMA. Net institutional purchases in the current quarter at 1.6M shares, which represents about 3.7% of the company's float of 43.24M shares.

10. Akorn, Inc. (AKRX): Engages in the manufacture and marketing of diagnostic and therapeutic pharmaceutical products, hospital drugs, and injectable pharmaceuticals in the United States and internationally. The stock is currently 10.18% above its 20-day SMA, 10.73% above its 50-day SMA, and 34.67% above its 200-day SMA. Net institutional purchases in the current quarter at 8.7M shares, which represents about 12.88% of the company's float of 67.56M 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 , US Markets


Kapitall

Kapitall

More from Kapitall:

Related Videos

Budgeting for Baby
Budgeting for Baby                  
A Home to Retire In
A Home to Retire In                 

Stocks

Referenced

Most Active by Volume

60,294,258
  • $16.905 ▼ 0.85%
46,568,731
  • $13.28 ▼ 6.41%
39,405,816
  • $76.38 ▼ 3.37%
38,675,208
  • $14.607 ▼ 1.24%
37,474,048
  • $97.2399 ▼ 1.57%
34,753,319
  • $3.4125 ▼ 2.22%
32,976,787
  • $99.20 ▼ 1.54%
29,798,359
  • $24.965 ▼ 0.81%
As of 10/1/2014, 02:08 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com