Six Materials Stocks Getting Love From the Smart Money

Michael Teague |

Basic Materials can be a challenging sector for stock-pickers, but one that is well worth the effort for those self-directed investors who are not afraid of a little bit of risk.

Materials companies operate against the backdrop of global economic conditions, to say nothing of commodities futures trading, and their operations are often uniquely dependent upon favorable environmental conditions, and the lone investor must adjust her or his understanding of fundamental analysis if the desired returns are to be obtained.

Though not by any means fool-proof, the amount of a company that is owned by financial institutions can be a good indicator of its underlying strength. Institutions have incredible research tools and other information streams that allow them to consider all of the variables as part of a complete picture.

One piece of fundamental data that investors can use in making their choices is the change in the rate of institutional transactions of a given stock. The figure represents the increase or decrease in institutional ownership of a company over the last three months.

The following six Materials stocks have a market-share of $300,000 or greater, and have posted the largest increases in institutional ownership of their shares over the last three months, meaning that the “smart money” is thinking that now is the right time to buy in:

Gastar Exploration Ltd. (GST)

Industry: Independent Oil & Gas

Market Cap: $371.11 million

Price: $6.47

Institutional Ownership: 36 percent

3-Month Increase in Institutional Ownership: +25.09 percent

2014 Return: -6.50 percent

 

Plains GP Holdings LP (PAGP)

Industry: Oil & Gas Pipelines

Market Cap: $15.77 billion

Price: $26.03

Institutional Ownership: 9.10 percent

3-Month Increase in Institutional Ownership: +28 percent

2014 Return: -2.76 percent

Midcoast Energy Partners LP (MEP)

Industry: Independent Oil & Gas

Market Cap: $920.23 million

Price: $20.35

Institutional Ownership: 27.10 percent

3-Month Increase in Institutional Ownership: 99.90 percent

2014 Return: +3.85 percent

Western Refining Logistics LP (WNRL)

Industry: Oil & Gas Pipelines

Market-Cap: $1.23 billion

Price: $26.90

Institutional Ownership: 10.10 percent

3-Month Increase in Institutional Ownership: +100.60 percent

2014 Return: +4 percent

OCI Partners LP (OCIP)

Industry: Major Diversified Chemicals

Market Cap: $2.15 billion

Price: $26.71

Institutional Ownership: 0.20 percent

3-Month Increase in Institutional Ownership: +302.50 percent

2014 Return: -3.22 percent

Crestwood Midstream Partners LP (CMLP)

Industry: Oil & Gas Pipelines

Market Cap: $2.27 billion

Price: $23.43

Institutional Ownership: 52.40 percent

3-Month Increase in Institutional Ownership: +312.15 percent

2014 Return: -5.90 percent

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
GST Gastar Exploration Inc 1.27 -0.05 -3.79 698,422
OCIP OCI Partners LP representing Limited Partner Inter 6.75 0.25 3.85 100,132
WNRL Western Refining Logistics LP representing limited 20.95 0.25 1.21 158,437
MEP Midcoast Energy Partners L.P. representing limited 6.25 0.25 4.17 61,850
PAGP Plains Group Holdings L.P. Class A Shares represen 34.47 -0.34 -0.98 675,129
MECK Mecklermedia Corp 0.01 0.00 0.00 0

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