Ahead Of The Trend: 7 Rallying Stocks With Institutional Selling And Short Increases

Institutional investors such as hedge funds typically have access to more sophisticated market information than main street traders, so their buying and selling activity are closely monitored by the investment community. For this list we looked for hedge fund selling as a sign that rallying stocks are ready for downside. To support this assumption, we further looked for companies with significant increase in shares shorted to their otherwise low short float.

More on this list:

Rallying: These stocks have been doing very well lately. Their current share price is above their 20, 50 and 200 day moving averages (MA). This signals upward momentum.

Low short floats: Short sellers benefit when a share price falls, a high short float indicates short sellers are increasing their "short" position in anticipation of a drop off. But, in line with the stock's upward rally, the stocks in our list have short floats. We screened for floats between 0% and 10%, an optimistic range. 

But what goes up will eventually come down. So we looked for signals the glory days are over.

Hedge Fund sales: Net institutional sales in excess of 5% of share float in the current quarter. This indicates money mangers are pessimistic about future performance.

Increase in short selling: As mentioned above, an increase in shares shorted (and increase in share float) is a pessimistic signal. When short sellers start buying into these rallying stocks it enforces the idea that the market believes downside is more likely than further upside.  We screened for an increase in short selling month over month representing at least 1% of share float. 

Seven companies made the cut.  

Business Section: The List

Hedge funds and an increasing number of short sellers are signaling an end of a rally for these names. Do you agree with their bearish predictions?

Use this list as a starting point for your own analysis. 

Analyze These Ideas: Getting Started: Access a performance overview for all stocks in the list

1. Body Central Corp. ( BODY): Operates as a specialty retailer of young women's apparel and accessories in the South, Mid-Atlantic, and Midwest regions of the United States.

Market cap at $187.62M, most recent closing price at $11.35. Float short at 4.57%.

The stock is currently rallying 13.91% above its 20-day MA, 23.48% above its 50-day MA and 28.16% above its 200-day MA.

Net institutional sales in the current quarter at -1.5M shares, which represents about 10.94% of the company's float of 13.71M shares.

Shares shorted have increased from 586.86K to 742.23K over the last month, an increase which represents about 1.13% of the company's float of 13.71M shares. Days to cover ratio at 3.63 days.

 

2. Family Dollar Stores Inc. ( FDO): Operates a chain of self-service retail discount stores primarily for low and middle income consumers in the United States.

Market cap at $7.36B, most recent closing price at $64.02. Float short at 7.4%.

The stock is currently rallying 2.09% above its 20-day MA, 4.84% above its 50-day MA and 2.94% above its 200-day MA.

Net institutional sales in the current quarter at -5.4M shares, which represents about 6.18% of the company's float of 87.43M shares.

Shares shorted have increased from 5.92M to 7.75M over the last month, an increase which represents about 2.09% of the company's float of 87.43M shares. Days to cover ratio at 5.49 days.
 

3. Global Geophysical Services, Inc. ( GGS): Provides an integrated suite of seismic data solutions to the oil and gas industry worldwide.

Market cap at $166.26M, most recent closing price at $4.38. Float short at 6.2%.

The stock is currently rallying 7.11% above its 20-day MA, 41.62% above its 50-day MA and 3.1% above its 200-day MA.

Net institutional sales in the current quarter at -1.3M shares, which represents about 6.57% of the company's float of 19.79M shares.

Shares shorted have increased from 1.89M to 2.17M over the last month, an increase which represents about 1.41% of the company's float of 19.79M shares. Days to cover ratio at 5.24 days.
 

4. Global Payments Inc. ( GPN): Provides electronic transaction processing services for merchants, independent sales organizations (ISO), financial institutions, government agencies, and multi-national corporations located in the United States, Canada, Europe, and the Asia-Pacific region.

Market cap at $3.58B, most recent closing price at $46.98. Float short at 4.96%.

The stock is currently rallying 0.64% above its 20-day MA, 0.67% above its 50-day MA and 3.88% above its 200-day MA.

Net institutional sales in the current quarter at -4.9M shares, which represents about 6.5% of the company's float of 75.42M shares.

Shares shorted have increased from 2.61M to 3.75M over the last month, an increase which represents about 1.51% of the company's float of 75.42M shares. Days to cover ratio at 4.46 days.

 

5. Halozyme Therapeutics, Inc. ( HALO): Engages in the development and commercialization of recombinant human enzymes that transiently modify tissue under the skin to facilitate injection of other therapies or correct diseased tissue structures for clinical benefits.

Market cap at $811.36M, most recent closing price at $7.17. Float short at 8.88%.

The stock is currently rallying 12.75% above its 20-day MA, 22.33% above its 50-day MA and 20.24% above its 200-day MA.

Net institutional sales in the current quarter at -6.9M shares, which represents about 10.73% of the company's float of 64.32M shares.

Shares shorted have increased from 8.68M to 9.66M over the last month, an increase which represents about 1.52% of the company's float of 64.32M shares. Days to cover ratio at 7.04 days.

 

6. Panera Bread Co. ( PNRA): Operates, and franchises retail bakery-cafes in the United States and Canada.

Market cap at $5.59B, most recent closing price at $189.66. Float short at 7.12%.

The stock is currently rallying 3.94% above its 20-day MA, 7.39% above its 50-day MA and 14.23% above its 200-day MA.

Net institutional sales in the current quarter at -1.7M shares, which represents about 6.17% of the company's float of 27.54M shares.

Shares shorted have increased from 1.36M to 1.99M over the last month, an increase which represents about 2.29% of the company's float of 27.54M shares. Days to cover ratio at 3.6 days.

 

7. Plains Exploration & Production Company ( PXP): An independent oil and gas company, primarily engages in acquiring, developing, exploring, and producing oil and gas in California, Texas, and Louisiana.

Market cap at $6.34B, most recent closing price at $48.96. Float short at 2.74%.

The stock is currently rallying 6.86% above its 20-day MA, 6.08% above its 50-day MA and 14.5% above its 200-day MA.

Net institutional sales in the current quarter at -5.9M shares, which represents about 5.18% of the company's float of 113.85M shares.

Shares shorted have increased from 2.20M to 3.49M over the last month, an increase which represents about 1.13% of the company's float of 113.85M shares. Days to cover ratio at 1.13 days.
 

 

( List compiled by Rebecca Lipman, Kapitall Editor. Institutional data sourced from Fidelity, short data from Yahoo! Finance, all other data sourced from Finviz.)

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