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Two years into the aftermath of 2008's market crash, economic uncertainty persists, and many American investors remain afraid to invest in the stock market -- in the first seven months of this year, investors withdrew a whopping $33.12 billion from domestic stock market mutual funds, instead opting for "safe" investments like bonds.
According to Credit Suisse analyst Doug Cligott, "Small investors are losing their appetite for risk," even as the market rebounds. And given the rise of the individual investor over the past several decades, the contrast is all the more striking.
Following past recessions, individual investors have jumped at the chance to ride the wave of recovery. But this time around, with unemployment high, job growth stagnant, and a constant threat of market volatility, there's a general sense among small investors that stocks are no longer a "safe" and profitable bet.
Retail investors might be running for the hills, but our calculations show that institutional investors aren't spooked by current market conditions.
Based on the money flows of S&P 500 stocks, we found that institutional investors didn't add significantly to their stock positions, but they didn't sell, either. Our numbers show an average increase in institutional ownership of 0.05% for all S&P 500 stocks over the past three months.
Institutional investors, it seems, are being greedy while retail investors are being fearful. Maybe Wall Street is starting to see the public's nervousness as a buy signal?
Who's side do you want to be on?
Top institutional inflows over past three months
Here is a list of the stocks that saw the largest increase in institutional ownership over the past three months. For each stock, we'll list the percentage increase in ownership. Data sourced from Reuters.com.
- PPL Corp. (NYSE: PPL ) : +42.81%
- CF Industries Holdings (NYSE: CF ) : +29.42%
- Baker Hughes (NYSE: BHI ) : +23.36%
- American International Group (NYSE: AIG ) : +21.86%
- Polo Ralph Lauren (NYSE: RL ) : +16.01%
- Micron Technology (NYSE: MU ) : +15.93%
- Citigroup (NYSE: C ) : +12.92%
- SCANA (SCG): +11.91%
- Stanley Black & Decker (NYSE: SWK ) : +9.67%
Interactive Chart: Press "Play" to compare analyst ratings and annual performance of all the stocks mentioned above ...
Top institutional outflows over past three months
Here is a list of the stocks that saw the largest decrease in institutional ownership over the past three months. For each stock, we'll list the percentage decrease in ownership.
- AK Steel Holding (NYSE: AKS ) : -19.25%
- Massey Energy (NYSE: MEE ) : -14.48%
- NASDAQ OMX Group (Nasdaq: NDAQ ) : -13.67%
- United States Steel (NYSE: X ) : -12.70%
- Office Depot (NYSE: ODP ) : -11.30%
- Ford Motor (NYSE: F ) : -11.20%
- AutoNation (NYSE: AN ) : -10.81%
- Sears Holdings (Nasdaq: SHLD ) : -10.45%
- AutoZone (NYSE: AZO ) : -10.03%
Interactive Chart: Press "Play" to see compare the debt levels of all the companies mentioned above ...
For more from Kapitall, check out Warren Buffett's Trades: Visualizing the Oracle's Portfolio Tweaks.
At time of writing, Kapitall's Eben Esterhuizen and Alicia Sellitti did not own any of the securities mentioned above.