When picking stocks, it's a good idea to see what the institutional investors are doing. Mutual funds' stock purchases can run for weeks, fueling demand for their picks. So what are funds buying now?
The IBD Stock Screener shows three stocks in different sectors that funds are buying heavily. All three have formed bullish tight patterns that could lead to big moves. The buy point for each of the three stocks is also its all-time high.
The IBD Screen Of The Day also filters stocks with superior technical ratings and recent sales and earnings growth.
Ingersoll Rand has formed a four-weeks-tight pattern with a buy point of 92.44. Shares gapped up on Feb. 16, after fourth-quarter earnings were announced, and have held most of that gain.
Sales grew 12% to $1.8 billion while earnings per share of 86 cents rose 19%, according to IBD MarketSurge. The company expects sales growth of 6% at the midpoint in 2024. Ingersoll Rand makes vacuums, pumps and other industrial equipment used in several industries.
Ingersoll Rand has a Composite Rating of 97 and an EPS Rating of 93. The Relative Strength Rating also is impressive at 91. The stock ranks first in the industrial machinery industry group.
Mutual funds own 64% of shares outstanding. More funds have been buying shares of the stock over the past seven quarters. More buying in recent weeks has also given the stock an Accumulation/Distribution Rating of B+. The Artisan Mid Cap Fund (ARTMX) and T. Rowe Price New Horizons Fund (PRNHX) hold shares of Ingersoll Rand.
Funds Buy Ameriprise Financial
Ameriprise Financial rallied after breaking out at 350.94 in November and has now formed a three-weeks-tight with an entry at 419.24.
Shares rose in a big outside day after fourth-quarter results on Jan. 25 before edging even higher. Sales grew 9% to $3.9 billion while earnings of $7.20 per share grew 10%, reversing from a loss in the prior quarter.
Ameriprise provides financial services and has $1.4 trillion in assets under management. Mutual funds own 46% of outstanding shares.
Trane Technologies is also not far off from a three-weeks-tight buy point of 289.79. The buy point is also an all-time high. Shares gapped up on Feb. 1 after fourth-quarter results were released. Sales grew 9% to $4.4 billion while earnings per share of $2.17 were up 19% from the prior year.
Trane Technologies makes climate control products that industries and homes use.
Mutual funds own 52% of shares outstanding. More funds have been net buyers over the past six quarters. MarketSurge shows the number of funds growing from 2,525 in Q1 of last year to 2,834 at the end of Q4.
The stock also holds an Accumulation/Distribution Rating of B+, indicating buying from institutional investors in recent weeks as well.
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