Hedge Funds Are Buying These 6 Stocks with EPS Price Mismatches

Page 1 of 2

Hedge Funds Are Buying These 6 Stocks with EPS Price MismatchesLooking for stocks deeply undervalued to analyst expectations? If so, this stock list may be of interest to you:

The names below meet all of the following criteria:

- Market cap above $50 million

- Significantly net purchasing from hedge funds and other institutional buyers in the current quarter.

- Significant Earnings Per Share to Share Price Mismatch.

More information on these screens:

Institutional Buying

Because institutional investors handle such large amounts of money, it is easy enough to assume that they know what they’re doing — or at the very least know more than the average investor. This is why these investors are also sometimes referred to as “smart money.”

If institutional investors start investing in a company, regular investors can assume that some of the most talented analysts and money managers expect the company’s share prices to increase over time. The stocks on our list are experiencing significant investment from big money.

Significantly Undervalued to EPS Trends

We compared price trends to changes in EPS estimates over the last month.

Based on the assumption that P/E is equal to a constant k, increases in EPS should be matched by increases in price. When they don’t match up, a mispricing may have occurred.

We screened for stocks with faster growth in EPS estimates than price over the last month, which may indicate that these names are being undervalued. (A more comprehensive explanation can be found in this post.)

Business Section: Investing Ideas

Here’s the result of our screen. Look at the data below; Could a mispricing lead to positive upside for these names?

Use this list as a starting point for your own analysis. List Average 1-Year Return: 82%.

Interactive chart:  Compare changes in average analyst rating over the past two years

Hedge Funds Are Buying These 6 Stocks with EPS Price Mismatches

1. Abercrombie & Fitch Co. (NYSE:ANF) (EarningsAnalystsFinancials): Operates as a specialty retailer of casual apparel for men, women, and kids. Market cap at $3.75B, most recent closing price at $47.17.  Net institutional purchases in the current quarter at 4.5M shares, which represents about 6.15% of the company’s float of 73.19M shares. The EPS estimate for the company’s current year increased from 2.53 to 2.96 over the last 30 days, an increase of 17.%. This increase came during a time when the stock price changed by 12.05% (from 41.75 to 46.78 over the last 30 days).

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

The 10 Cheapest Places to Retire Abroad

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!