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Bullish Trinity: Stocks With Short Covering, Insider & Hedge Fund Buying

Stocks in this article: JNS TPX VMW VPRT

When it rains, it pours. It's a saying we apply to our personal lives here and there when things get really good, or really bad. In this case, companies can apply it to their good fortune in investor trends. [Related List: 7 Biotechnology Stocks With Insider Buying Activity]

We made a list of stocks that have signaled not one, but three promising trends that signal optimism among investors.

1. Insider Buying -  If anyone knows what is going on with a company, it has to be the people that work there. But when insiders start to buy up shares of their company, there’s really only one good explanation: They think the share price is undervalued. If they're buying, then insiders are confident there is more upside potential, and might have a hunch their stock is going to rally. Of course, these predictions aren’t always realized, but it’s a strong indicator for outsiders to go by.

We screened for names showing net insider buying in the current quarter in excess of 1% share float. 

2. Institutional Buying - Insider activity alone isn't enough to actually shift market prices. This day and age it's the work of hedge funds that make it their daily business to buy, sell and move millions of shares every day that really get share prices moving. But hedge funds pay attention to insiders too, so insider activity can set a spark that puts institutional buying (or selling) in action. 

Like insiders, institutional sales are closely watched and reported. Here we screen for names showing significant net institutional buying in the current quarter, representing at least 5% of share float.

3. Short Covering - We screened for companies with a recent significant decreases in shares shorted. This signals optimism, or rather a lack of pessimism, from short sellers – a group of investors who benefit when share price falls. 

We screened for names showing short covering month over month in excess of 1.5% share float. 

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