What Are Institutions and HFTs Doing This Week?

By Irene Aldridge (https://twitter.com/irenealdridge)

Post date: 2024-01-24 11:28:45 GMT

Discover the Latest Moves of Institutions and HFTs - Find Out What Stocks are Being Bought and Sold This Week

Have you ever wondered what other sophisticated players are buying and selling? Two core products of AbleMarkets are institutional flows and flows generated by High-Frequency Traders (HFTs). AbleMarkets uses sophisticated artificial intelligence-based inferences to examine most of the market data in real time and understand and classify market activity. This week, AbleMarkets has observed institutional investors being bullish on several stocks, including Kellanova/Kellogg (K) and bearish on others like CorEnergy Infrastructure Trust (CORR). At the same time, HFTs were seen buying Ingersoll Rand (IR) and selling Deciphera Pharmaceuticals (DCPH), among other names discussed below.

Institutional investors often take several days to accumulate or divest a position, in order to 1) disturb the market as little as possible and 2) to conceal their trading activity as much as possible. Institutions also tend to accumulate for the long haul, so their activity is highly predictive of the future market movements.

As Figure 1 shows, while direction of net HFT and institutional flows are somewhat correlated, institutions and HFTs generally do their own thing. Unlike institutional investors, high-frequency traders trade stocks with the highest temporal inefficiencies, a.k.a., slowest alpha decay. Examples of such can be a chronically delayed response to news, or a lagged price response in a high-frequency statistical arbitrage. HFTs also bid up or depress the prices, but only for very short bursts. Unlike stocks impacted by institutional activity, stocks bought by HFTs are bound to decline in a short order, and stocks sold by HFTs are likely to rise quickly to their fundamental levels. HFTs generally have no interest in the economics underlying the corporate price moves and evaluate the attractiveness of the stock simply based on its short-term profit potential.

For the week of January 22, 2024, the top buys on the institutional minds are:

    1. Kellanova, formerly Kellogg Co. (NYSE:K), a familiar cereal and other packaged consumer goods manufacturer

      Northrim BanCorp, Inc. (NRIM), a regional bank based in Alaska

      Dawson Geophysical Company (DWSN), an oil and gas equipment and services company based in Texas.
  • The top institutional sell picks were:

    1. CorEnergy Infrastructure Trust, Inc. (CORR), a penny stock that is a specialty Real Estate Investment Trust (REIT) that just divested of oil pipelines and is at risk of delisting.

      iShares Asia/Pacific Dividend ETF (DVYA), that tracks high dividend paying companies listed in Australia, Hong Kong, Japan, New Zealand and Singapore.

      SeaChange International, Inc. (SEAC), a Boston-based software company that facilitates aggregation and distribution of video and advertising content worldwide.

  • At the same time, the top companies that have interested HFT buyers are:

    1. Ingersoll-Rand, Inc. (IR), a manufacturer of mission-critical air, fluid, energy, specialty vehicle, and medical technologies distributed in the United States, Europe, the Middle East, India, Africa, and the Asia Pacific.

      Myriad Genetics, Inc. (MYGN)

      Day One Biopharmaceuticals, Inc. (DAWN), a clinical-stage biopharmaceutical company that develops and commercializes targeted therapies for patients with genetically defined cancers.

  • The top companies that have attracted HFT sellers this week are:

    1. Deciphera Pharmaceuticals, Inc. (DCPH), a company also serving cancer patients by manufacturing medications that lower anti-cancer drug resistance.

      AnaptysBio, Inc. (ANAB), an immunology therapeutics manufacturer, and

      Expedia Group, Inc. (EXPE), an online travel company.

  • The companies discussed above are just the top names by the proportion of institutional and HFT activity in either buy or sell directions. AbleMarkets covers a vast universe of companies that are available for your research and investment needs. Click here to subscribe to AbleMarkets today!

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