Clorox, Fortune Brands, and More Had Insiders Buy Shares

Page 1 of 2

Sales of stock by insiders can indicate that the insiders are negative about the company’s prospects, but not always; it is rational to diversify, and if an insider already depends on a company for a portion of their income it can make sense to sell even if they have neutral feelings about the stock. Purchases by insiders are another story. The same logic explaining why insiders might sell even if they aren’t bearish on the stock should prevent insiders from buying- unless, of course, they are so confident that the company is going to beat expectations that it’s worth giving up diversification. This is one explanation for why insider purchases, on average, beat the market. Read more about studies on insider trading. We have gone through our database of insider trading filings and here are five stocks that insiders have bought recently:

A senior Vice President at Health Management Associates, Inc. (NYSE:HMA) bought 10,000 shares at an average price of $7.76. The $2.1 billion market cap hospital operator is smaller than peers such as HCA Holdings (NYSE:HCA), and the market seems to be depending on the company to grow faster than other companies in the industry. The forward P/E is 9- even with HCA’s- but the trailing P/E is 14 and earnings have actually been down to flat in recent quarters. Larry Robbins’ Glenview Capital was a major investor in both of these hospital stocks during the third quarter (see more stock picks from Larry Robbins); as for ourselves, we think that we’d lean towards HCA.

GLENVIEW CAPITAL

Multiple insiders have been buying shares of women’s retailer Francesca’s Holdings Corp (NASDAQ:FRAN), including the president and the CEO. Consensus buying by insiders is a particularly bullish signal (learn more about consensus insider purchases), at least on average. The company has been reporting strong financials, with revenue up 43% in the third quarter compared to a year ago and net income doubling. However, the valuation already captures significant future growth given the trailing P/E of 26. It’s also widely shorted, and we think that we might avoid it.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

The 10 Biggest Outlet Malls in USA

The 5 Most Popular Rap Songs of All Time

The 10 Countries that Eat the Most Meat

The10 Most Expensive Countries to Fly To

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!