BALTIMORE (Stockpickr) -- Put down the 10-K filings and the stock screeners. It's time to take a break from the traditional methods of generating investment ideas. Instead, let the crowd do it for you.
From hedge funds to individual investors, scores of market participants are turning to social media to figure out which stocks are worth watching. It's a concept that's known as "crowdsourcing," and it uses the masses to identify emerging trends in the market.
Crowdsourcing has long been a popular tool for the advertising industry, but it also makes a lot of sense as an investment tool. After all, the market is completely driven by the supply and demand, so it can be valuable to see what names are trending among the crowd.
While some fund managers are already trying to leverage social media resources like Twitter to find algorithmic trading opportunities, for most investors, crowdsourcing works best as a starting point for investors who want a starting point in their analysis.
Today, we'll leverage the power of the crowd to take a look at some of the most active stocks on the market today.
Nearest Resistance: N/A
Nearest Support: $87
Catalyst: Hedge Fund Stakes
Fast food chain Yum! Brands (YUM) jumped almost 6% on Friday, boosted by the announcement that hedge funds Third Point and Corvex Management had built big positions in the $37 billion restaurateur. That's more than just a sign of approval. Investors piled into Yum! at the end of last week in hopes that Third Point founder Dan Loeb or Corvex chief Keith Meister could help boost YUM's share price through activist moves. Shares hit new highs on the disclosures.
Making new highs is significant from an investor psychology standpoint because it means that everyone who has bought shares in the last year is sitting on gains. As a result, the "back to even" mentality is less of a concern than it would be for a name with a higher proportion of shareholders sitting on losses. For traders who want to ride the bullish momentum, there's still time to build a position in YUM now.