Matthew Galgani


One of the keys to successfully investing in stocks and spotting the best stocks to watch is to look for companies like Paycom Software (PAYC), Kemet (KEM), Amgen (AMGN), and Global Payments (GPN) that are seeing strong institutional demand.

The screen below identifies stocks being heavily bought by large investors, as evidenced by their up/down volume ratio and Accumulation/Distribution Rating. Checking these two metrics is an excellent way to gauge demand for a stock.

Plus, the Composite Rating gives an overall look at how strongly each company and its stock is displaying the most important stock-picking criteria.

Paycom, Amgen Among Top Stocks Seeing Strong Demand
The Accumulation/Distribution Rating tracks heavy buying and selling in a stock over the past 13 weeks. It focuses on the type of buying and selling in large lots that only the mutual funds, pension funds, banks and other large investors participate in.

An A Accumulation/Distribution Rating points to heavy buying in a stock, while the lowest possible E Accumulation/Distribution Rating shows heavy selling. A C rating is essentially neutral, showing a roughly equal amount of buying and selling by institutional investors.

The up/down volume ratio is another way to gauge demand. It compares the total amount of volume during up days in price vs. down days within the past 50 trading sessions. A reading above 1.0 points to rising demand.

Kemet leads the list below with a 2.8 up/down volume ratio, and has a B+ Accumulation/Distribution Rating. Amgen (2.3 up/down volume ratio; A- Accumulation/Distribution Rating), Paycom (2.2; B+), and Global Payment (2.2; A) are also displaying strong demand.

Based in Florida, electrolytic capacitor-maker Kemet is getting acquired by Yageo. Amgen has shown tight, healthy trading since breaking out in late October, while Paycom is searching for support after clearing a cup-shape base in late November. It closed Friday’s session 1% below the entry. Global Payments is also trying to recapture a buy point it broke out of earlier.

Author: Matthew Galgani

Source: Investors: Investors Are Heavily Buying These 19 Stocks

What have the best mutual funds been buying recently? Top money managers have invested heavily in several large-cap stocks, such as Alibaba (BABA), Mastercard (MA), Microsoft (MSFT), Splunk (SPLK), Facebook (FB), CVS Health (CVS) and Costco (COST).

Over the last three months, the best mutual funds have also picked up shares in several of the best IPO stocks to watch. InMode (INMD), Palomar (PLMR), and StoneCo (STNE) fit that bill.

Many of these stocks are in or near a new buy zone, including Alibaba, Facebook, Splunk, StoneCo and Costco.

New Buys By The Best Mutual Funds

Note: Be sure to check these Excel files to see all the stocks on the latest list of new buys and list of new sells by the best mutual funds.

The Best Mutual Funds Invest Over $1 Billion In Alibaba Stock

Chinese e-commerce giant Alibaba leads the pack of new buys by the best mutual funds, garnering over $1.3 billion in investments. The stock has also seen eight quarters of rising fund ownership and sports a 1.5 up/down volume ratio. In further evidence of strong institutional demand, 294 funds with an A+ rating from IBD have reported a position in the stock.

Other leading stocks receiving large investments include JPMorgan (JPM) (approximately $969.7 million), CVS Health ($969.2 million), Microsoft ($933.1 million), and Facebook ($868.8 million) and Bank of America (BAC) ($793.8 million).

Which Stocks Are On The IBD Breakout Stocks Index Right Now?

Stocks To Watch: New Buys Near A Buy Point

As the stock market continues to flirt with another round of all-time highs on the major indexes, many leading stocks being picked up by the best mutual funds are testing or entering new buy zones. Here’s a quick review of some of the best stocks to watch.

  • Alibaba Stock: After a nice breakout in good volume in late November, the IBD 50 stock pulled back to its 10-day line before finding support and rebounding again past its 195.82 buy point.
  • Mastercard Stock: The Visa (V) rival is trying to charge ahead from a later-stage flat base showing a 293.79 entry. Mastercard sports a remarkable 125.1% return on equity and a 55.7% pretax profit margin.
  • Splunk Stock: Since clearing a new buy point in February, the Big Data stock and IBD Big Cap 20 member has shown seesaw action and is once again peeking its head through a 142.80 entry. The buy range extends to 150.99.
  • Microsoft Stock: With a strong presence in cloud computing, video games and software in general, Microsoft is trading at the upper edge of its 141.78 to 148.87 buy zone. Its relative strength line is just below new-high ground.
  • StoneCo Stock: Partially owned by Warren Buffett-led Berkshire Hathaway (BRKB), this Brazilian payment processor and IBD 50 stock has been trying to definitively move past a 39.55 buy point in a cup with handle.
  • InMode Stock: This August IPO stock has already earned a spot on both the IBD 50 and Sector Leaders. The Israeli company sells radio frequency devices used in women’s health. After an impressive run, InMode pulled back, but is trying to rebound.
  • Palomar Stock: This IPO Leaders member has been on a tear since going public in April and is now extended beyond its first base. The provider of specialty insurance products posted 233% earnings growth in its latest quarterly report.

New Sells By The Best Mutual Funds

JPMorgan led the crop of stocks being sold by the best funds, with 39 net sellers (73 selling minus 34 buying). BofA was next with 30 net sellers (64 selling vs. 34 buying), followed by Norfolk Southern (NSC) with 27 (43 selling minus 16 buying).

Author: Matthew Galgani

Source: Investors: Alibaba, Facebook, Microsoft Lead Big Buys By The Best Mutual Funds

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