Why is this important? After all, don't stock prices fall by the amount of any dividend payout? Yes, that is true -- on the ex-dividend date.

But there is evidence that investors bid up the price of a stock significantly between the date a special dividend is announced and the ex-dividend date.

Bottom line: Special dividends can create trading opportunities! The key is to buy the stock before the special-dividend announcement and that is why the list of stock candidates below should be of interest to investors.

Since corporate executives don't always have the average shareholder's financial interest as a top priority (unfortunately), I believe a company is more likely to issue a special dividend if corporate insiders own a large chunk of company stock and would personally benefit from the dividend payout.

The company must also generate enough cash to pay a large dividend and not be burdened by a lot of debt. Consequently, I screened for stocks where:

1. Insiders own at least 30% of shares outstanding
2. Free cash flow is greater than 10% of the stock’s market cap
3. Debt-to-capital ratio is less than 30%

The stock screen came up with seven stocks. These companies are prime candidates for special dividend announcements between now and the end of 2012:

• NCI Inc. (NCIT), which is involved in cybersecurity software.
• GameStop (GME), the video game retailer.
• ManTech International (MANT), which is involved in electronic warfare.
• Nasdaq OMX Group (NDAQ), the securities exchange operator.
• Molina Healthcare (MOH), which provides Medicaid insurance plans.
• Legg Mason (LM), a money management firm.
• Cross Country Healthcare (CCRN), a healthcare staffing and outsourcing company.

More from TheStockAdvisors.com​

• Dividend stocks: 'Best of the best'
•  4 Graham-Buffett style stocks
• 3 lesser-known, dividend values