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Contrarian Ideas: Three Underestimated Companies For Your Watch List

17.05.12

Do you associate with the term “contrarian investor”? If so, you may be intrigued by the following three companies, all recently dumped by hedge funds but are experiencing positive sentiment from company insiders. What’s more, these companies also have a history of beating analyst expectations.

Institutional selling (net sales of a company from mutual funds, hedge funds, pensions, and bank trust departments) signals that sophisticated investors believe there is more downside than upside to the names. These firms often have more money and access to research than the average investor, and therefore assumed to make better investment decisions.

If that’s the case for the three names below, why are they attracting positive attention from their company insiders? Insider executives know a lot more about their company’s prospects than most other investors, so if they’re using their own money to buy the shares of their employers, it’s probably a good idea to pay close attention to their bullishness.

Source: Kapitall Blog (blog)