7 Stocks That May Be Topping

05/03/2011 8:00 am EST

Focus: STOCKS

These stocks are now being dumped by the smart money even after making new highs for the year, making them potential targets for traders in search of good short-selling opportunities.

If you are a strong trend trader, this article probably won’t fit your trading style. However, if you think this market is about to top, this may be the perfect place for you to find some potential stocks to sell short. What better way to find those stocks than to follow the smart money?

Below are seven stocks that have reached 52-week highs but have also seen significant selling by mutual funds.

To compile this list, we focused on stocks with the following characteristics:

1) US companies with market cap above $300 million
2) Traded at its 52-week high during recent sessions
3) Experienced significant mutual fund selling over the current quarter

Charter Communications Inc. (CHTR) is in the CATV (cable) systems industry and has a market cap of $6.43 billion.

chart
Click to Enlarge

On a net basis, mutual funds sold 10.7 million shares over the current quarter. This is equivalent to 10.34% of the outstanding shares. The stock is exhibiting strong upside momentum, currently trading 7.18% above its 20-period simple moving average (SMA), 15.78% above its SMA50, and 45.96% above its SMA200. The stock has had a good month, gaining 14.04%.

RPC Inc. (RES) is in the oil and gas equipment and services industry and has a market cap of $3.88 billion.

chart
Click to Enlarge

On a net basis, mutual funds sold 2.8 million shares over the current quarter. This is equivalent to 6.61% of the outstanding shares. The stock is a short squeeze candidate, with a short float at 27.3% (equivalent to 7.17 days of average volume).

It is exhibiting strong upside momentum, currently trading 10.1% above its SMA20, 22.04% above its SMA50, and 58.47% above its SMA200. The stock has gained 190.15% over the last year.

Article Continues on Page 2

|pagebreak|

Ryder System, Inc. (R) is in the rental and leasing services industry and has a market cap of $2.77 billion.

chart
Click to Enlarge

On a net basis, mutual funds sold 2.6 million shares over the current quarter. This is equivalent to 5.18% of the outstanding shares. The stock has had a couple of great days, gaining 7.44% over the last week.

WABCO Holdings Inc. (WBC) is in the auto parts industry and has a market cap of $4.84 billion.

chart
Click to Enlarge

On a net basis, mutual funds sold 2.9 million shares over the current quarter. This is equivalent to 4.36% of the outstanding shares. This is a risky stock that is significantly more volatile than the overall market (beta = 2.07).

It is exhibiting strong upside momentum, currently trading 14.56% above its SMA20, 18.88% above its SMA50, and 42.42% above its SMA200. The stock has had a couple of great days, gaining 18.05% over the last week.

Federal Realty Investment Trust (FRT) is a REIT in the retail industry and has a market cap of $5.36 billion.

chart
Click to Enlarge

On a net basis, mutual funds sold 2.3 million shares over the current quarter. This is equivalent to 3.76% of the outstanding shares. The stock is a short squeeze candidate, with a short float at 5.62% (equivalent to 8.16 days of average volume). The stock has gained 17.07% over the last year.

Article Continues on Page 3

|pagebreak|

Pitney Bowes Inc. (PBI) is in the business equipment industry and has a market cap of $5.33 billion.

chart
Click to Enlarge

On a net basis, mutual funds sold 6.4 million shares over the current quarter. This is equivalent to 3.15% of the outstanding shares. The stock is a short squeeze candidate, with a short float at 7.86% (equivalent to 7.45 days of average volume). While the stock had gained 8.68% over the last year, last Friday was a tough day for this stock and it may have already begun its descent.

Key Energy Services Inc. (KEG) is in the oil and gas drilling and exploration industry and has a market cap of $2.32 billion.

chart
Click to Enlarge

On a net basis, mutual funds sold 4.4 million shares over the current quarter. This is equivalent to 3.13% of the outstanding shares. This is a risky stock that is significantly more volatile than the overall market (beta = 2.27).

The stock is a short squeeze candidate, with a short float at 9.03% (equivalent to 5.3 days of average volume). It has had a couple of great days recently, however, gaining 5.92% over the last week.

By the Staff at Kapitall.com

Related Articles on STOCKS

Keyword Image
11 Reasons to Buy Microsoft
5 hours ago

For our latest recommendation, we revisit one of the world's most prominent technology companies, Mi...

Keyword Image
A Trio of Top-Tier Biotechs
5 hours ago

We hold three biotech stocks in our growth portfolio — Biogen (BIIB), Bioverativ (BIVV), and R...

Keyword Image
Saudis, Oil and ETFs
5 hours ago

Under the guise of clamping down on “widespread corruption,” Prince Mohammed bin Salman ...