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Rallying Financial Stocks Boosted by Hedge Fund Buying

By Kapit all - Updated Apr 7, 2017 at 4:34PM

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When Wall Street starts buying, it may be a cue to us down on Main Street.

Do you like to follow the buying trends of smart money-investors?

These investors include institutional investors, such as hedge fund, mutual fund, and pension fund managers. Their specific knowledge makes their trades interesting to analysts and other investors.

To illustrate this, we ran a screen on the financial sector for those stocks with bullish sentiment from the smart money. We began by finding financial stocks with overall market bullishness, rallying above their 20-day, 50-day, and 200-day moving averages.

We then screened for those with significant net institutional purchases over the current quarter. These numbers both indicate that smart money-investors are generally positive on these names.

Business section: investing ideas
Below are the stocks that were sifted out with this screen. These financial stocks are currently rallying above their 20-day, 50-day, and 200-day moving averages. They have also seen strong net buying from institutional investors.

Do you think these names will outperform, as the smart money expects? (Click here to access free, interactive tools to analyze these ideas.)

1. First Merchants (Nasdaq: FRME) provides financial and banking products and services. Its market cap is $356.61 million, with a most recent closing price of $12.56. The stock is currently trading 1.26% above its 20-day SMA, 4.11% above its 50-day SMA, and 33.82% above its 200-day SMA. Net institutional purchases in the current quarter total 2.1 million shares, which represent about 7.96% of the company's float of 26.38 million shares.

2. Bridge Capital Holdings operates as the bank holding company for Bridge Bank, National Association, which provides commercial and retail banking services to business professionals, retail customers, and small- and medium-sized commercial businesses in California. Its market cap is $227.07 million, with a most recent closing price of $14.87. The stock is currently trading 3.45% above its 20-day SMA, 10.51% above its 50-day SMA, and 32.59% above its 200-day SMA. Net institutional purchases in the current quarter total 1.5 million shares, which represent about 21.46% of the company's float of 6.99 million shares.

3. Texas Capital BancShares operates as the holding company for Texas Capital Bank, National Association, which provides various banking products and services for commercial and high-net-worth customers in Texas. Its market cap is $1.44 billion, with a most recent closing price of $38.02. The stock is currently trading 4.53% above its 20-day SMA, 7.64% above its 50-day SMA, and 27.47% above its 200-day SMA. Net institutional purchases in the current quarter total 2.6 million shares, which represent about 7.12% of the company's float of 36.5 million shares.

4. Symetra Financial Corporation operates as a financial-services company in the life insurance industry in the U.S. Its market cap is $1.42 billion, with a most recent closing price of $11.99. The stock is currently trading 1.94% above its 20-day SMA, 5.32% above its 50-day SMA, and 21.21% above its 200-day SMA. Net institutional purchases in the current quarter total 16.1 million shares, which represent about 11.73% of the company's float of 137.26 million shares.

5. BofI Holding (Nasdaq: BOFI) operates as the holding company for Bank of Internet USA, which provides various consumer and wholesale banking services primarily through the Internet in the U.S. Its market cap is $215.57 million, with a most recent closing price of $18.98. The stock is currently trading 4.6% above its 20-day SMA, 8.48% above its 50-day SMA, and 19.75% above its 200-day SMA. Net institutional purchases in the current quarter total 1.2 million shares, which represent about 11.95% of the company's float of 10.04 million shares.

6. Monmouth Real Estate Investment (NYSE: MNR) is a real-estate investment trust. It owns, manages, and leases properties to investment-grade tenants on long-term leases. Its market cap is $412.06 million, with a most recent closing price of $10.30. The stock is currently trading 2.84% above its 20-day SMA, 6.49% above its 50-day SMA, and 19.71% above its 200-day SMA. Net institutional purchases in the current quarter total 2.8 million shares, which represent about 7.23% of the company's float of 38.74 million shares.

7. American Capital Agency (Nasdaq: AGNC) is also a real-estate investment trust. Its market cap is $9.65 billion, with a most recent closing price of $32.02. The stock is currently trading 2.73% above its 20-day SMA, 5.85% above its 50-day SMA, and 17.75% above its 200-day SMA. Net institutional purchases in the current quarter total 35.6 million shares, which represent about 11.87% of the company's float of 299.91 million shares.

8. Equity One engages in the ownership, management, acquisition, renovation, and development of neighborhood and community shopping centers in the U.S. Its market cap is $2.4 billion, with a most recent closing price of $20.75. The stock is currently trading 0.24% above its 20-day SMA, 3.73% above its 50-day SMA, and 17.74% above its 200-day SMA. Net institutional purchases in the current quarter total 4.8 million shares, which represent about 8.53% of the company's float of 56.3 million shares.

9. Kennedy-Wilson Holdings operates as a diversified real-estate company that provides investment and real-estate services in the U.S. and Japan. Its market cap is $728.59 million, with a most recent closing price of $14.08. The stock is currently trading 1.12% above its 20-day SMA, 2.68% above its 50-day SMA, and 16.2% above its 200-day SMA. Net institutional purchases in the current quarter total 2.1 million shares, which represent about 6.54% of the company's float of 32.1 million shares.

10. Education Realty Trust (NYSE: EDR) develops, acquires, owns, and manages student housing communities located near university campuses in the U.S. Its market cap is $1.06 billion, with a most recent closing price of $11.20. The stock is currently trading 0.19% above its 20-day SMA, 3.73% above its 50-day SMA, and 15.66% above its 200-day SMA. Net institutional purchases in the current quarter total 9.8 million shares, which represent about 10.53% of the company's float of 93.06 million 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.

Kapitall's Eben Esterhuizen does not own any of the shares mentioned above. Institutional data sourced from Fidelity. All other data from Finviz.

The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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Stocks Mentioned

AGNC Investment Corp. Stock Quote
AGNC Investment Corp.
AGNC
$12.64 (-1.21%) $0.15
Axos Financial, Inc. Stock Quote
Axos Financial, Inc.
AX
$46.44 (-2.27%) $-1.08
EdR Stock Quote
EdR
EDR
Monmouth Real Estate Investment Corporation Stock Quote
Monmouth Real Estate Investment Corporation
MNR
First Merchants Corporation Stock Quote
First Merchants Corporation
FRME
$43.26 (-1.57%) $0.69

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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