When it comes to investing, are you a follower of the bullish activities of others? How about the activities of company insiders and short-sellers?
If so, the following list of 10 stocks may be of interest to you. Each company on our list has experienced significant levels of insider buying and short covering from short-sellers. Furthermore, all names have market caps over $300 million.
If you're curious why these are strong indicators of bullish sentiment, take a moment to review the following before analyzing the final list below.
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. 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.
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. All of the names on this list have experienced a decrease in short selling.
Insider buying: Many analysts follow insider buying trends because, after all, insiders know more about their companies than anyone else. Their investment activity is closely monitored and can tell us a lot about where they feel the business is heading.
Insider buying is represented as a percentage of the share float. Companies experiencing insider buying over the past six months provide an indicator that insiders think the stock is undervalued at current levels. Inversely, insider selling serves as a negative indicator. All of the names on our list have experienced insider buying.
Market capitalization (market cap): Market capitalization, commonly referred to as market cap, is the total market value of a company's outstanding shares. It can be thought of as a measure of company's size. It can be calculated by multiplying the number of shares by the current price of the shares. Companies with higher market cap are considered to have more trustworthy information because they have greater histories of profitability and data.
Insiders and short-sellers think these names are profitable investments. Do you? (Click here to access free, interactive tools to analyze these ideas.)
List compiled by Eben Esterhuizen, CFA:
1. Carmike Cinemas (Nasdaq: CKEC ) : Operates as a motion picture exhibitors in the United States. Shares shorted have decreased from 1.50M to 1.08M over the last month, a change that represents about 4.80% of the company's float of 8.75M shares. Over the last six months, insiders were net buyers of 4,523 shares, which represents about 0.05% of the company's 8.75M share float.
2. Conns (Nasdaq: CONN ) : Operates as a specialty retailer of home appliances, consumer electronics, home office equipment, lawn and garden products, mattresses, and furniture in the United States. Shares shorted have decreased from 3.75M to 3.51M over the last month, a change that represents about 1.68% of the company's float of 14.25M shares. Over the last six months, insiders were net buyers of 20,000 shares, which represents about 0.14% of the company's 14.25M share float.
3. Opko Health (NYSE: OPK ) : Engages in the discovery, development, and commercialization of novel and proprietary technologies primarily in the United States, Chile, and Mexico. Shares shorted have decreased from 12.31M to 10.13M over the last month, a change that represents about 1.60% of the company's float of 136.01M shares. Over the last six months, insiders were net buyers of 6,854,500 shares, which represents about 5.04% of the company's 136.01M share float.
4. Echo Global Logistics (Nasdaq: ECHO ) : Provides technology enabled transportation and supply chain management services in the United States. Shares shorted have decreased from 2.67M to 2.50M over the last month, a change that represents about 1.58% of the company's float of 10.73M shares. Over the last six months, insiders were net buyers of 202,262 shares, which represents about 1.89% of the company's 10.73M share float.
5. Collective Brands (NYSE: PSS ) : Engages in the wholesale and retail of footwear and related accessories worldwide. Shares shorted have decreased from 20.33M to 19.53M over the last month, a change that represents about 1.45% of the company's float of 55.24M shares. Over the last six months, insiders were net buyers of 20,139 shares, which represents about 0.04% of the company's 55.24M share float.
6. Pacific Sunwear of California (Nasdaq: PSUN ) : Operates as a retailer rooted in the action sports, fashion, and music influences of the California lifestyle. Shares shorted have decreased from 8.61M to 8.13M over the last month, a change that represents about 1.34% of the company's float of 35.86M shares. Over the last six months, insiders were net buyers of 10,327,071 shares, which represents about 28.8% of the company's 35.86M share float.
7. Pinnacle Financial Partners (Nasdaq: PNFP ) : Operates as the bank holding company for Pinnacle National Bank, which provides commercial banking services to individuals, small-to medium-sized businesses, and professional entities in Tennessee. Shares shorted have decreased from 5.19M to 4.78M over the last month, a change that represents about 1.31% of the company's float of 31.39M shares. Over the last six months, insiders were net buyers of 13,882 shares, which represents about 0.04% of the company's 31.39M share float.
8. Synthesis Energy Systems (Nasdaq: SYMX ) : Operates as a global energy and gasification technology company that provides products and solutions to the energy and chemicals industries. Shares shorted have decreased from 195.77K to 160.08K over the last month, a change that represents about 1.23% of the company's float of 2.89M shares. Over the last six months, insiders were net buyers of 10,000 shares, which represents about 0.35% of the company's 2.89M share float.
9. American Superconductor (Nasdaq: AMSC ) : Provides wind turbine designs and electrical control systems primarily in North America, Europe, and the Asia-Pacific. Shares shorted have decreased from 9.11M to 8.66M over the last month, a change that represents about 1.22% of the company's float of 37.03M shares. Over the last six months, insiders were net buyers of 1,508,478 shares, which represents about 4.07% of the company's 37.03M share float.
10. Procera Networks (NYSE: PKT ) : Provides network traffic awareness, analysis, and control solutions for broadband service providers. Shares shorted have decreased from 872.03K to 795.77K over the last month, a change that represents about 1.20% of the company's float of 6.34M shares. Over the last six months, insiders were net buyers of 3,000 shares, which represents about 0.05% of the company's 6.34M share float.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Eben Esterhuizen and Rebecca Lipman do not own any of the shares mentioned above. Short data from Yahoo! Finance. Institutional data sourced from Fidelity.
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