Dan Connelly of Kapitall.com has dredged up this list of breakout contenders under $5, especially given who's interested in buying up shares.

Looking for low-priced stocks institutional investors are buying? Large institutions and hedge funds, chock full of savvy financiers, do not get involved in investments if they haven’t done their research and aren’t prepared to stick it out for the long haul.

Therefore, if an asset is experiencing institutional buying it is likely that some of the savviest minds in the industry have done their due diligence before becoming invested in a stock. Are they always right? No, but they tend to be better stock pickers than the general investing public over the long-term.

We compiled a list of 11 stocks under $5 per share that have seen significant institutional buying.

If institutions continue investing do you think these stocks could price higher? Use this list as a starting-off point for your own analysis. A few of these stocks are small caps with “lowish” volume, so use caution and only invest in size according to your risk tolerance.

1. Avanir Pharmaceuticals (AVNR) engages in acquiring, developing, and commercializing novel therapeutic products for the treatment of central nervous system disorders, primarily in the United States. It has a market capitalization of $408.54 million. Net institutional purchases in the current quarter are at 8.8 million shares, which represents about 6.55% of the company's float of 134.31 million shares.

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2. E-Commerce China Dangdang (DANG) operates as a business-to-consumer e-commerce company in China. It has an approximate market cap of $399.55 million. Net institutional purchases in the current quarter are at 4.5 million shares, which represents about 13.35% of the company's float of 33.72 million shares.

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3. DryShips (DRYS) engages in the ownership and operation of dry bulk carriers and drilling rigs that operate worldwide. Market cap at $981.2 million. Net institutional purchases in the current quarter are 24.8 million shares, which represents about 6.75% of the company’s float of 367.17 million shares.

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Tickers Mentioned: AVNR, DANG, DRYS, EXEL, EXTR