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