One great source for interesting stock ideas comes from sell side analyst ratings. When these bank analysts write a report on a company, and the analyst is reputable, it can have a big effect on the stock price.
We ran a screen for stocks with current “Buy” ratings from UBS (i.e. analysts at UBS expect these stocks to outperform).
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Another great way to see how smart investors feel about a stock is to look at the collective trading activity of institutional investors. They represent big pools of money such as investment banks, pension funds, mutual funds, hedge funds, endowment funds, etc. When they invest in stocks, they can invest hundreds of thousands of dollars or more at one time. These transactions, called “block trades,” similar to buy ratings from reputable firms, can have a significant effect on share prices.
Business Section: Investing IdeasWe combine both bullish signals in making the list below. All 6 stocks that made the list have UBS buy ratings, which have been renewed in the past year, and significant net institutional buying in the current quarter. The “smart money” is feeling optimistic about these stocks. Do you agree? Use this list as a starting off point for your own analysis.
1. Abercrombie & Fitch Co. (ANF): Operates as a specialty retailer of casual apparel for men, women, and kids. Market cap at $3.9B, most recent closing price at $48.99. On 05/01/2012, UBS had a Buy rating on the stock. Net institutional purchases in the current quarter at 4.5M shares, which represents about 6.15% of the company’s float of 73.19M shares. 2. On Assignment Inc. (ASGN): Provides flexible and permanent staffing solutions in the United States, Europe, Canada, Australia, New Zealand, and Bermuda. Market cap at $1.04B, most recent closing price at $19.88. On 06/20/2012, UBS had a Buy rating on the stock. Net institutional purchases in the current quarter at 7.8M shares, which represents about 17.45% of the company’s float of 44.70M shares.
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