(Look for update in Google section)

As you may or may not know, The Wall Street Journal reports on stocks that have major investment inflows and outflows based on weakness and strength, respectively. After scouring through all of the numbers, I developed a list of stocks that could provide a decent return.

Money flows of block trades (10,000 shares) are usually generated by large institutions: banks, mutual funds, and hedge funds.

Although they try to invest at a slower rate than an independent investor so they don't pump up the price quickly and cause unrest in the market, their investment ultimately means that the price will go up.

The price may go up for two reasons:

1. Their high capital inflows to these stocks causes a chain reaction; other investors will begin to see the inflows and start to buy it themselves.

2. These institutions have a strong conviction that the price of these particular stocks will go up in the near future.

Money flows are a great way to derive stock investing advice for one large reason, "If you can't beat 'em join 'em." The money flows are calculated by the dollar value of composite uptick trades minus the dollar value of downtick trades, which in lay terms translates to net asset flows. The best bets for stocks that will do well and had high money flows on Tuesday (September 2nd), and Wednesday (September 3rd) are the following:

• Exxon Mobil (XOM)- had highest single-company stock flow on Tuesday. Over $40 million flowed into Exxon on the recent weakness. Exxon will continue to report record profits for the next couple years because of high oil prices and a turn to dwindling production and supply. The oil sector still has yet to see the high stock prices it deserves.
• Google (GOOG)- [UPDATE: Money flows into Google on Thursday hit $148 million. This shows further interest in Google, and that the stock is most likely overdue for a bounce to the upside.] as of 1:00PM on Wednesday, Google has had net asset flows of $30.4 million due to block trades (most likely institutions). Google has a lot of room still to grow. They just released Google Chrome, the new web browser by Google. At a price of $461.80 a share, there is a lot of upside back up to its 52-week high of $747.
• Chesapeake Energy Corp. (CHK)- had Wednesday net flows of block trades of $23.5 million. Energy companies have not performed well even with high energy prices, but that leaves room for value realization.
• Coca-Cola (KO)- with $13.8 million net big trade flows. Coke can avoid downturns of the US Economy because so much of their business is abroad. Although Coke is a discretionary item, people act like it is a staple. People will always drink their Coke products. Investor can share in Coke's profits.

This is a different perspective on investing. Many investors make money by following where the money is flowing. Riding the coattails of large institutions allows you to emulate the gains they realize on particular trades. My only warning is to make sure you don't wear out your welcome and stay invested after the institutions sell off their share.

Images courtesy of flickr.com




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