Institutional investing is a key measure that retail investors can use to gauge market sentiment on an individual stock or asset. Hedge funds, advisors and other institutional investors employ full teams of analysts to determine whether an asset is worth recommending to clients.
Retail investors can piggyback off this research by examining which shares institutional clients are buying month after month.
Here’s a look at four stocks that saw significant institutional buying in Q4 2025, each with at least $1 billion in purchases—potentially signaling confidence in their long-term value.
HEICO Sees Massive Jump in Investor Interest
In Q4 of 2024, few shares saw an increase in interest quite like HEICO (NYSE: HEI), which has seen share prices jump 13% since the end of the previous business period.
Institutional buying jumped from $45 million to $5.63 billion in the fourth quarter, indicating a sharp increase in interest among buyers like Polar Asset Management and Emerald Advisers.
After beating its most recent consensus EPS estimate by $0.27 per share, this Q4 confidence seems to be paying off in the short term.
Analysts give HEICO a Moderate Buy consensus rating, predicting an additional 3.61% upside in the coming year.
OXY Price Stumbles, Presents Opportunity to Investors
International oil and gas giant Occidental Petroleum (NYSE: OXY) has seen a persistent negative downward trend in share prices, down 26% since last year.
In the past week, analyst downgrades have pushed shares even further, reducing prices by 8% since the beginning of the week. This has caused the stock’s P/E ratio to fall below 20—a level not seen in years.
Despite this turbulence, institutional investors purchased $1.69 billion in OXY shares in Q4, up from $659 million in Q3 of the same year.
While analyst expectations rate this stock a Hold, consensus price estimates for next year also predict more than a 31% potential upside.
This confidence is supported by the company’s most recent earnings release, which beat analyst expectations by $0.13 per share.
Merck & Co. Bring Competitive Dividends, P/E Ratio
Another major market cap stock with a recently suppressed P/E ratio, Merck & Co., Inc. (NYSE: MRK), hasn’t seen institutional purchasing slow down.
While shares are currently trading near their 52-week low of about $93 per share in early March, analysts continue to predict a 25% potential price upside, supported by the shares’ 13.84 P/E ratio.
In Q4, institutional investors purchased $13 billion in shares, up from $4.65 billion in Q3.
MRK can potentially be a solid long-term play for dividend investors. It offers a competitive 3.48% dividend yield supported by a 48.14% payout ratio.
Merck has also increased its annual dividend for the last 14 years, further contributing to its long-term income-generating potential.
Prudential Financial Offers Riskier Play, Low P/E Potential
Retail investors with a higher risk tolerance may want to consider buying more shares of Prudential Financial (NYSE: PRU), an S&P 500 financial stock trading at a new 50-day low of about $109 per share.
While a recent earnings estimate miss contributes to a one-month 12% dip in share prices, buying trends indicate some institutional investors believe this may be an overcorrection.
In Q4 of 2024, institutional investors purchased $1.17 billion in shares of PRU compared to $486 million in Q3.
Showcasing a newly lowered P/E ratio of 14.71 plus a higher-than-average 4.91% dividend yield, the current slump in share prices could present a rare buying opportunity for retail investors.
However, before buying, it’s also important to note the shares’ increasing short interest, which has increased by more than 6.5% since last month.
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The article "Institutional Investors Bet $1B on These 4 Stocks—Should You?" first appeared on MarketBeat.
