3 Retailers Favored By Hedge Funds And Short Sellers

By Kapitall | February 21, 2012 AAA

Written by Alexander Crawford



Consumer confidence is currently at a one-year high while the unemployment rate is at a three-year low. Will this cause the return of the U.S. consumer? If you believe so, here are some ideas to invest with this idea.
We ran a screen on the retail industry for stocks seeing bullish sentiment from several directions. First, we screened those that were rallying above their 20-day, 50-day and 200-day moving averages. This indicates that the overall market is more optimistic on these names.

Next, we screened that list to find those that have also had significant net institutional purchases over the current quarter. This means that institutional investors, such as hedge fund managers and mutual fund managers, are buying these stocks and believe they will outperform.

Finally, we screened for those with bullish sentiment from short sellers, with significant decreases in shares shorted month-over-month.

Interactive Chart: Press Play to compare changes in market cap over the last two years for the stocks mentioned below.





Business Section: Investing Ideas

The final stocks from this screen are listed below. These retailers are performing well, and they have optimism from both hedge fund managers and short sellers.

Are you optimistic on these names as well? (Click here to access free, interactive tools to analyze these ideas.)

1. J. C. Penney Company, Inc. (NYSE: JCP): Operates department stores in the United States and Puerto Rico. The stock is currently trading 5.50% above its 20-day moving average, 16.74% above its 50-day MA, and 32.37% above its 200-day MA. Net institutional purchases in the current quarter at 9.3M shares, which represents about 6.45% of the company's float of 144.08M shares. Shares shorted have decreased from 32.44M to 30.60M over the last month, a decrease which represents about 1.28% of the company's float of 144.08M shares.

2. Liz Claiborne Inc. (NYSE: LIZ): Engages in the design and marketing of a range of apparel and accessories. The stock is currently trading 3.98% above its 20-day moving average, 11.13% above its 50-day MA, and 45.63% above its 200-day MA. Net institutional purchases in the current quarter at 3.4M shares, which represents about 5.36% of the company's float of 63.47M shares. Shares shorted have decreased from 25.04M to 23.92M over the last month, a decrease which represents about 1.76% of the company's float of 63.47M shares.

3. Oxford Industries Inc. (NYSE: OXM): Engages in designing, sourcing, and marketing apparel products primarily in the United States and the United Kingdom. The stock is currently trading 4.45% above its 20-day moving average, 13.18% above its 50-day MA, and 35.73% above its 200-day MA. Net institutional purchases in the current quarter at 1.1M shares, which represents about 7.94% of the company's float of 13.86M shares. Shares shorted have decreased from 1.24M to 1.10M over the last month, a decrease which represents about 1.01% of the company's float of 13.86M shares.

Disclosure: Kapitall's Alexander Crawford does not own any of the shares mentioned above. Short data sourced from Yahoo! Finance, institutional data sourced from Fidelity.

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