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7 Stocks Insiders Are Buying Like Crazy - 10148 views
Academic studies have shown that insider trading is most profitable when several insiders buy around the same time. A study by University of Illinois professor Josef Lakonishok and his student Inmoo Lee shows that insider purchases generate more than 7 % per year in excess returns above index funds when there are several insiders purchasing.
Here are the seven stocks insiders are buying like crazy:
1. Bank of America (BAC): We reported significant insider trading in Bank of America three weeks ago. On Wednesday, a fourth director purchased 5,000 shares at $11.30. This is nearly 10% less than the price paid by previous insiders. We weren’t enthusiastic about the previous purchases, but we believe this is a better point to monkey insider buys.
2. Versar (VSR): This is a $30 million company with several insider purchases over the past 3 months. The prices paid were as low as $2.60 per share at the end of September and as high as $3.25 on Wednesday. The daily transaction volume is less than 50,000 shares, so it doesn’t seem to be a good stock to monkey.
3. Rimage (RIMG): This is another stock we have covered three weeks ago, trading sideways since. It seems insiders are buying Rimage below $16 per share. The stock was trading above $18 at one point in October. A more recent insider purchase was at $15.35 on Tuesday.
4. Harris Interactive (HPOL): This is another micro-cap stock that insiders are buying like crazy compared with the average trading volume. Unfortunately, the stock trades at 88 cents, and the average daily volume is 34,000 shares. The average insider paid around 86 cents per share during the past month. The latest transaction, nearly 15,000 shares, was on Wednesday.
5. Jamba (JMBA): Jamba Juice was very popular a couple of years ago, with a market value within reach of $1 billion. Today, the stock trades at $2.17 with a market cap of $130 million. There were three different insiders purchasing over the past few months. The first purchase was on Aug. 24 at $1.69. The latest transaction was on Tuesday at $2.04.
6. Citigroup (C): This is the second large bank with significant insider purchases. On November 3 insiders spent nearly $2.5 Million and bought Citigroup shares at prices around $4.30. These transactions, with the Bank of America purchases, imply that banking stocks are undervalued in general.
7. Buckeye Technologies (BKI): An insider bought Buckeye shares at the end of August at $10.75. The stock closed at $20.26 yesterday. A second insider purchased on Nov. 16 at $17.50, and the third insider purchased on Nov. 22 at $18.83. The stock increased by more than 7% in 10 days.
This article was originally published at Insider Monkey.