Worried Consumers: Hedge Funds Think These Stocks Will Take a Knock

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

Feeling worried? You're not alone.

American consumers' confidence levels appear to be shot, with Gallup polls showing record low consumer confidence levels and increased fears of being laid off.

Concerns of layoffs plague 30% of workers, compared to 26% in 2010. August 2009 saw fears at its worst, at 31%. Workers are also worried hours, benefits and wages will be reduced.

The high level of concern is reflected in U.S. consumer confidence which now polls at 44.5, well below estimates of 52, and far below a healthy economy's reading of 90.

All this worrying is sure to affect the companies that rely on consumer spending, which is on the rise overall but at a slower than expected rate.

When consumer confidence is low, consumers may be more hesitant to spend and hold back on big-ticket items. Consumers are also likely to scrimp and save wherever possible, from driving and eating out less to choosing cheaper cereal brands.

Consumer goods stocks are likely to take the biggest hit from worried and cash-strapped consumers.

Interested in tracking how the slowdown in consumer spending affects consumer companies? Below we list consumer spending stocks that have been dumped by hedge funds.

The "smart money" thinks these consumer stocks are facing hard times and are unlikely to rebound anytime soon. Do you agree?

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1. Citi Trends (CTRN): Operates as a retailer of urban fashion apparel and accessories in the United States. Net institutional sales in the current quarter at -1.1M shares, which represents about 8.22% of the company's float of 13.38M shares. The stock is exhibiting bearish momentum, and it's currently trading below its 20-day, 50-day and 200-day moving averages.

2. DSW Inc. (DSW): Operates as a specialty branded footwear retailer in the US. Net institutional sales in the current quarter at -3.1M shares, which represents about 20.2% of the company's float of 15.35M shares.

3. Foot Locker, Inc. (FL): Operates as a retailer of athletic footwear and apparel. Net institutional sales in the current quarter at -5.5M shares, which represents about 3.62% of the company's float of 151.80M shares.

4. Gap Inc. (GPS): Operates as a specialty retailing company. Net institutional sales in the current quarter at -31.0M shares, which represents about 7.74% of the company's float of 400.28M shares. The stock is exhibiting bearish momentum, and it's currently trading below its 20-day, 50-day and 200-day moving averages.

5. Pacific Sunwear of California Inc. (PSUN): Operates as a retailer rooted in the action sports, fashion, and music influences of the California lifestyle. Net institutional sales in the current quarter at -5.2M shares, which represents about 14.68% of the company's float of 35.42M shares. The stock is exhibiting bearish momentum, and it's currently trading below its 20-day, 50-day and 200-day moving averages.

6. Stage Stores Inc. (SSI): Operates as a specialty department store retailer that offers branded and private label apparel, accessories, cosmetics, and footwear for women, men, and children in the United States. Net institutional sales in the current quarter at -1.1M shares, which represents about 3.45% of the company's float of 31.93M shares. The stock is exhibiting bearish momentum, and it's currently trading below its 20-day, 50-day and 200-day moving averages.

7. The Talbots Inc. (TLB): Operates as a specialty retailer and direct marketer of women's apparel, accessories, and shoes in the United States and Canada. Net institutional sales in the current quarter at -3.8M shares, which represents about 6.15% of the company's float of 61.83M shares. The stock is exhibiting bearish momentum, and it's currently trading below its 20-day, 50-day and 200-day moving averages.

8. Wet Seal Inc. (WTSLA): Operates stores that sell fashionable and contemporary apparel and accessory items designed for female customers. Net institutional sales in the current quarter at -6.5M shares, which represents about 8.74% of the company's float of 74.33M shares. Momentum traders might be interested to know that the company is exhibiting strong upward momentum (currently trading above the 20-day, 50-day and 200-day moving averages).

9. Big Lots Inc. (BIG): Operates as a broad line closeout retailer in the United States. Net institutional sales in the current quarter at -6.4M shares, which represents about 9.27% of the company's float of 69.01M shares.

10. BJ's Wholesale Club Inc. (BJ): Operates warehouse clubs in the eastern United States. Net institutional sales in the current quarter at -5.5M shares, which represents about 10.98% of the company's float of 50.10M shares. It's been a good couple of weeks for the stock, and it's currently trading above its short- and long-term moving averages.



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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