This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

3 Highly Shorted Stocks Under $5 Bought Up By Hedge Funds

Do you like to follow the buying trends of smart money institutional investors? We created a stock list with that idea in mind. [More Investing Ideas:  Hedge Funds Are Buying 3 Rallying Technology Dividend Stocks]

We began by screening for stocks trading under $5 a share with bearish sentiment, with float shorts above 10%. High float short is a sign of bearish sentiment among short sellers, who benefit when share price falls. We further screened for increase in shares shorted month over month, a sign that bearish sentiment is still escalating. 

Then, for a contrarian edge, we screened for those with bullish sentiment from institutional investors, with significant net institutional purchases over the last quarter representing at least 5% of share float. This indicates that institutional investors such as hedge fund managers and mutual fund managers expect these names to outperform into the future. 

If hedge funds are correct in their optimism, short sellers might be forced to cover their short positions quickly as share prices rise, lending possibility to a short squeeze, which sends price even higher. 

For an interactive version of this chart, click on the image below. Tool provided by Kapitall. Login to access free research tools, share practice portfolios, and more.

Short sellers are pessimistic about future stock price while institutional investors are bullish.  Do you think hedge funds are calling it right on these names? Use this list as a starting point for your own analysis.

1. Forest Oil Corp. ( FST): Engages in the acquisition, exploration, development, and production of oil, natural gas, and natural gas liquids primarily in North America.

Market cap at $565.58M, most recent closing price at $4.74. Float short: 17.51%.

Net institutional purchases in the current quarter at 6.4M shares, which represents about 7.38% of the company's float of 86.76M shares.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,024.06 +183.54 1.03%
S&P 500 2,108.29 +22.78 1.09%
NASDAQ 5,005.3910 +63.9670 1.29%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs