5 stocks seeing insider buying
It's not always a sure sign of success, but when a company's execs buy shares of their employer it's worth taking note
By Jim Woods, InvestorPlace.com
When you're looking for stocks to add to your portfolio, a good thing to ask yourself is "What are those who are 'in the know' buying?" Those in the know could be analysts, or they could be top stock advisors. The bottom line is that insider buying is sometimes a key indicator of success.
Company insiders such as CEOs, board members or other
corporate officers are perhaps best able to assess their own company and its
stock's potential, as they have the inside scoop on the goings on within their
It's not always true, of course, but it's worth noting. To that end, here are five stocks seeing insider buying right now:
What often happens is that when there is a period of heavy
insider buying, a stock tends to rise substantially. And while this
relationship between heavy insider buying and a stock's rise is by no means
causal, what does tend to happen is that professional investors -- hedge funds,
mutual funds, pension funds -- will identify that heavy insider buying and then
go with the insiders. In effect, these professional investors are saying that
they'll have what the insiders are having.
Over the past three months, there's been heavy insider buying in many high-profile stocks. Not all of these stocks have seen a sharp rise in their share price over this time period, but there have been a handful of stocks with both big insider buying and big price moves that merit further investor attention. Let's take a look at five of these stocks now.
According a Bloomberg screen of large-cap stocks showing heavy insider buying over the past three months, real estate investment trust Simon Property Group (SPG) was among the companies with the most insider buying based on share price market value. The big insider buying in SPG -- nearly $26 million in market value over the past three months-was accompanied by a 19.9% rise in the stock over the same period. Though some think REITs are overvalued right now, SPG is certainly worth another look.
Another stock showing heavy insider buying is oil and gas services firm Enterprise Products. The firm's insiders picked up over $15 million worth of the stock since late January, and the share's gained 11.5% over that time period. There also was heavy insider buying in retail pharmacy giant CVS Caremark (CVS) with over $5 million in market value bought by insiders. That stock is up 11% over the past three months.
Two more stocks showing strong insider buying are DirecTV (DTV) and Dr. Pepper Snapple Group (DPS). DirecTV saw nearly $2 million worth of its stock bought up by insiders over the past several months, while Dr. Pepper Snapple Group witnessed insiders drink up over $1 million worth of stock. DTV shares climbed 12.3% since late January, while DPS shares fizzed 21.8% higher over the same period. Considering rival Dish Network slashed its CEO pay 95% recently, the contrast could not be clearer in the satellite TV business.
Judging by the both the heavy insider buying and the accompanying share price appreciation of these five stocks over the past three months, investors may want to think about having what these insiders are having.
As of this writing, Jim Woods did not own positions in any of the stocks mentioned here.
- Top 10 High Yield Dividend Stocks in the Dow
- Dividend Investing - When is it Time to Sell a Dividend Stock
- 7 Low-Risk Dividend Stocks to Lock In
Copyright © 2014 Microsoft. All rights reserved.
The idea of US crude being a shelter from turmoil abroad may not be as far fetched as it seems.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.