Last week, the commodities market ended its bullish run with a dramatic about-face, as oil prices saw their sharpest fall-off in three years. Wall Street immediately started buzzing about the ramifications as a host of pundits and analysts chimed in with their two cents.
The pessimists saw it as the beginning of a long retreat to pre-run-up prices, as was the case in the commodity crash of 2008.
But the overall consensus dismissed this Chicken Little mentality, remaining convinced that commodities will continue to rise over the long term.
Most chalk up the pullback to speculators' overreaction. If anything, the dip is a "positive for the market," at least according Colin O'Shea, head of commodities at asset managers, Hermes.
"I see it as more of a pause, a short-term correction, which should help the consumer globally."
Goldman Sachs concurs, stating in a report issued Friday that, "even as oil prices are pulling back from their recent highs, we expect them to return to or surpass the recent highs by next year."
The logic behind their assessment is sound -- resources aren't becoming any less scarce, and growing economies in emerging markets like China will only up the demand for them.
With this in mind, we searched for commodity stocks that have seen institutional selling over the last quarter. Because unlike most other commodity stocks, these companies have not been pushed beyond fair value by over-excited speculators -- so if they're dumped with all the other commodity stocks, this could create a short-term misplacing opportunity.
And if you're a contrarian, and if you believe commodity prices will rebound again, all this excessive pessimism around commodity companies should raise a bright red flag. If you're willing to bank on a recovery from short-term setback, you may want to keep an eye on these stocks. (To access free, interactive tools to analyze these ideas, click here.)
(List sorted by the relative size of institutional selling during the current quarter.)
1. EXCO Resources (NYSE: XCO): Independent Oil & Gas Industry. During the current quarter, institutional investors have been net sellers of 37.0M shares, which represents about 29.11% of the company's float of 127.12M shares.
2. Rowan Companies (NYSE: RDC): Oil & Gas Drilling & Exploration Industry. During the current quarter, institutional investors have been net sellers of 13.1M shares, which represents about 10.35% of the company's float of 126.53M shares.
3. Allied Nevada Gold Corp (NYSE: ANV): Gold Industry. During the current quarter, institutional investors have been net sellers of 7.5M shares, which represents about 9.49% of the company's float of 79.07M shares.
4. Freeport-McMoRan Copper & Gold (NYSE: FCX): Copper Industry. During the current quarter, institutional investors have been net sellers of 40.0M shares, which represents about 4.26% of the company's float of 938.62M shares.
5. ExxonMobil (NYSE: XOM): Major Integrated Oil & Gas Industry. During the current quarter, institutional investors have been net sellers of 198.5M shares, which represents about 4.03% of the company's float of 4.92B shares.
6. Gold Fields (NYSE: GFI): Gold Industry. During the current quarter, institutional investors have been net sellers of 24.5M shares, which represents about 3.87% of the company's float of 633.82M shares.
7. Coeur d`Alene Mines (NYSE: CDE): Silver Industry. During the current quarter, institutional investors have been net sellers of 3.3M shares, which represents about 3.7% of the company's float of 89.14M shares.
8. Compania de Minas Buenaventura (NYSE: BVN): Gold Industry. During the current quarter, institutional investors have been net sellers of 6.1M shares, which represents about 3.39% of the company's float of 180.12M shares.
9. Unit (NYSE: UNT): Oil & Gas Drilling & Exploration Industry. During the current quarter, institutional investors have been net sellers of 1.6M shares, which represents about 3.38% of the company's float of 47.33M shares.
10. Titanium Metals (NYSE: TIE): Industrial Metals & Minerals Industry. During the current quarter, institutional investors have been net sellers of 3.1M shares, which represents about 3.12% of the company's float of 99.35M shares.
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. 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.
