Funds Like These Rallying Greek Stocks as Investors Return to Greece

Mary-Lynn Cesar, Kapitall: Greek yields fell to a record low on Friday, signaling rising confidence. Will Greek stocks benefit?

Yields on 10-year Greek bonds dropped to their lowest level in almost four years on Friday, according to a new report from MarketWatch. The yield fell to 6.84%, the first instance of a below 7% yield since April 2010. Greece received its bailout from international lenders the following month.

The Financial Times  writes that many strategists view yields in excess of 7% as "unsustainable" because the cost of repaying debt at that level becomes too burdensome for governments. Bond yields and prices have an inverse relationship, so when yields are falling, prices are actually rising. Bond prices increase because more investors are buying the debt security.

The drop in bond yields is the latest piece of good news for Greece. Earlier in February, data from the Hellenic Statistical Authority showed that the nation's economy contracted less than expected. The agency reported a contraction of 2.6% in the fourth quarter of 2013, which was less than the 3% decline experienced in the previous quarter. The figure also marked the country's best performance since the first quarter in 2010 when the economy shrank by 1.0%.

Unemployment and debt remain major issues for Greece, as the country continues to lead the European Union in both. Greece's unemployment rose to 28% in November from 26.3% a year earlier. Eurostat also recorded an increase in Greece's debt during the third quarter of 2013, rising by 3% year-over-year to 171.8%.

Investment Ideas

As investors return to Greece for bonds, we decided to look for Greek stocks that could be similarly deserving of such interest. We began by constructing a universe of Greek stocks, which we subsequently narrowed down by running two screens that indicate upside potential.

For our first screen, we looked for stocks with bullish sentiment from institutional investors as reflected in significant net institutional purchases over the last quarter representing at least 5% of share float. Purchases of this size indicate that these investors, which include hedge funds, mutual funds and pensions, believe these stocks will outperform in the future.

Next, we screened for stocks that are rallying above their 20-day, 50-day, and 200-day moving averages (MA). This shows that the stocks have strong upward momentum.

This focus on momentum inspired us to take a look at past performance and look for companies that have already been outperforming the market. We screened for stocks that have outperformed over the last quarter, with at least a 15% return.

We were left with three Greek stocks on our list, and all of them belong to the shipping industry.

The List

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

Click on the interactive chart below to see sales data over time.

Dig Deeper:  Compare analyst ratings to annual returns  for stocks mentioned.

Do you think these Greek stocks have upward momentum? Use this list as a starting point for your own analysis.

 

1. Paragon Shipping Inc. ( PRGN): Provides shipping transportation services worldwide.

Market cap at $80.28M, most recent closing price at $7.18.

Performance over the last quarter at 32.71%.

The stock is currently rallying 6.77% above its 20-day MA, 3.79% above its 50-day MA, and 27.00% above its 200-day MA.

Net institutional purchases in the current quarter at 779.4K shares, which represents about 7.9% of the company's float of 9.87M shares.
 

2. Star Bulk Carriers Corp ( SBLK): Operates as a shipping company providing seaborne transportation solutions in the dry bulk sector worldwide.

Market cap at $202.87M, most recent closing price at $12.44.

Performance over the last quarter at 33.22%.

The stock is currently rallying 7.38% above its 20-day MA, 1.56% above its 50-day MA, and 42.88% above its 200-day MA.

Net institutional purchases in the current quarter at 6.0M shares, which represents about 74.07% of the company's float of 8.10M shares.
 

3. Capital Product Partners L.P. ( CPLP): Provides seaborne transportation of refined oil products and chemicals.

Market cap at $930.96M, most recent closing price at $10.77.

Performance over the last quarter at 23.54%.

The stock is currently rallying 5.38% above its 20-day MA, 7.21% above its 50-day MA, and 20.76% above its 200-day MA.

Net institutional purchases in the current quarter at 5.2M shares, which represents about 19.74% of the company's float of 47.93M shares.
 

( List compiled by Mary-Lynn Cesar . Institutional data sourced from Fidelity. Quarterly sales data sourced from Zack's Investment Research. All other data sourced from Finviz.)

 

 

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