Fund Purchases And Winning Streaks: Are These Stocks Under 10 Dollars On Their Way Up?
Mary-Lynn Cesar, Kapitall: The S&P 500 had its longest winning streak of the year last month. Meanwhile, these stocks under 10 dollars are currently in the middle of theirs.
In most bull markets, the S&P 500's win streaks typically last for six days. According to Bespoke Investment Group, that trend changed in 2013 when win streaks started to last for seven or eight days.
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Unfortunately, that wasn't the case last month. The S&P 500 recorded a six-session win streak in late April, its longest of the year, as investors waited anxiously for quarterly earnings reports. Netflix (NFLX) beat expectations and announced an impending price hike, exciting investors even further.
Then more earnings came out, along with the Commerce Department's new home sales numbers, and investors were disappointed. The biotech sector continued to suffer as Amgen (AMGN) and Biogen IDEC (BIIB) reported earnings that missed estimates, and shares of both stocks slid.
Sales of new homes fell for the second consecutive month in March, dropping 14.5% to a seasonally adjusted annual rate of 384,000. CNNMoney's Matt Egan reported that the weak housing data drove investors to sell shares of home builders and home construction stocks, including Home Depot (HD), KB Home (KBH), and Lennar (LEN).
As investors wait for the next win streak to hit Wall Street, we decided to take a closer look at individual stocks that are currently outperforming the market. We began with a universe of stocks on winning streaks, which is measured by a persistence of days in which the stock outperformed the S&P 500 and low persistence of days underperforming the index. This ratio is calculated by dividing the longest winning streaks in days by the longest losing streak over the last month.
We then screened for stocks with bullish sentiment from institutional investors, which signals that these investors–hedge fund managers, mutual fund managers, pension funds, and more–believe in the upward potential of these stocks.