A wise investor once said, "Be greedy where others are fearful" -- an old adage to most, but words to live by for the contrarian. For the contrarian investor is always on the prowl for the companies that few others would touch with a ten-foot pole -- in other words, they love the stocks that you love to hate.
In the world of investing, extreme pessimism about a stock can sometimes indicate a good time to buy. Overly bearish investors often push a stock price below reasonable levels, offering an attractive entry point if you're willing to take the risk.
That said, it may not even be so risky, when you consider that most of the bad news is already priced into a stock's price -- investors expect the company to report bad news, blunting the impact of negative events (and reducing the stock's risk).
By contrast, if no one's expecting any good news to come out of the company anyway, a positive surprise could put a rocket on the share price.
All of the companies mentioned below have been dumped by institutional investors over the last two quarters. In addition, these companies are all scheduled to report earnings next week. (Click here to access free, interactive tools to analyze these ideas.)
Are institutional investors underestimating these companies? And will upcoming earnings surprises change investor sentiment around these names?
The list has been sorted alphabetically.
|
Company |
|
Scheduled Date for Earnings Release |
|
Institutional Investors |
|
Mutual Fund Investors |
|---|---|---|---|---|---|---|
|
Abbott Laboratories |
|
4/20 |
|
On a net basis, sold -19.6M shares in the current quarter, vs. -10.9M shares sold in the previous quarter |
|
On a net basis, sold -23.9M shares in the current quarter, vs. -20.8M shares sold in the previous quarter |
|
Boeing |
|
4/18 |
|
On a net basis, sold -2.4M shares in the current quarter, vs. -5.2M shares sold in the previous quarter |
|
On a net basis, sold -7.9M shares in the current quarter, vs. -6.4M shares sold in the previous quarter |
|
The Chubb Corporation |
|
4/21 |
|
On a net basis, sold -3.3M shares in the current quarter, vs. -7.1M shares sold in the previous quarter |
|
On a net basis, sold -6.2M shares in the current quarter, vs. -9.6M shares sold in the previous quarter |
|
Diamond Offshore Drilling |
|
4/21 |
|
On a net basis, sold -6.5M shares in the current quarter, vs. -2.7M shares sold in the previous quarter |
|
On a net basis, sold -11.2M shares in the current quarter, vs. -3.5M shares sold in the previous quarter |
|
Gilead Sciences |
|
4/21 |
|
On a net basis, sold -18.8M shares in the current quarter, vs. -36.5M shares sold in the previous quarter |
|
On a net basis, sold -5.2M shares in the current quarter, vs. -9.9M shares sold in the previous quarter |
|
International Business Machines |
|
4/19 |
|
On a net basis, sold -5.0M shares in the current quarter, vs. -13.9M shares sold in the previous quarter |
|
On a net basis, sold -2.8M shares in the current quarter, vs. -1.4M shares sold in the previous quarter |
|
Johnson & Johnson |
|
4/19 |
|
On a net basis, sold -139.0M shares in the current quarter, vs. -19.4M shares sold in the previous quarter |
|
On a net basis, sold -7.3M shares in the current quarter, vs. -2.0M shares sold in the previous quarter |
|
Lincare Holdings |
|
4/18 |
|
On a net basis, sold -5.8M shares in the current quarter, vs. -8.1M shares sold in the previous quarter |
|
On a net basis, sold -1.4M shares in the current quarter, vs. -1.3M shares sold in the previous quarter |
|
Lam Research Corporation |
|
4/20 |
|
On a net basis, sold -2.3M shares in the current quarter, vs. -1.1M shares sold in the previous quarter |
|
On a net basis, sold -2.9M shares in the current quarter, vs. -9.4M shares sold in the previous quarter |
|
McDonald's |
|
4/21 |
|
On a net basis, sold -8.7M shares in the current quarter, vs. -9.5M shares sold in the previous quarter |
|
On a net basis, sold -11.5M shares in the current quarter, vs. -6.0M shares sold in the previous quarter |
|
PACCAR |
|
4/19 |
|
On a net basis, sold -6.9M shares in the current quarter, vs. -1.9M shares sold in the previous quarter |
|
On a net basis, sold -4.5M shares in the current quarter, vs. -3.3M shares sold in the previous quarter |
|
The Travelers Companies |
|
4/21 |
|
On a net basis, sold -12.0M shares in the current quarter, vs. -8.6M shares sold in the previous quarter |
|
On a net basis, sold -6.5M shares in the current quarter, vs. -4.3M shares sold in the previous quarter |
Institutional data sourced from Fidelity.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned above. Analyst ratings sourced from Zacks Investment Research. Note: The numbers on top of items represent the forward P/E ratio, if available.
Kapitall's Eben Esterhuizen does not own shares of any companies mentioned.
