Our database of insider trading filings allows us to pick out companies that have seen recent insider purchases- studies show that on average stocks bought by insiders tend to beat the market- and take a brief look at the company to see if it might be worth investigating further. It’s impossible to buy every stock that insiders are buying, but it’s certainly possible to use insider buying as a screen to identify potential stock picks. Here are five stocks that insiders have been buying recently:
The former CEO of Dean Foods Company (NYSE:DF), who currently manages spinout WhiteWave but still sits on Dean’s Board of Directors, bought 10,000 shares of Dean at an average price of $17.25. The spinout makes comparisons to a year ago difficult, but Wall Street analysts apparently expect improvement at the business in 2013 as their forward earnings estimates- which imply a P/E of only 13- depend on a better bottom line than the company reported last quarter. Renaissance Technologies, whose success since inception has made founder Jim Simons a multi-billionaire, reported a position of 2.6 million shares at the end of the third quarter (see more stock picks from Renaissance Technologies). We’re not sure that Dean is a better buy than other packaged food companies.
Frank Laukien, the CEO of Bruker Corporation (NASDAQ:BRKR), increased his holdings of the company by buying 50,000 shares on December 7th at about $14 per share. Bruker provides scientific and technical instruments. Revenue and earnings were up in the third quarter of 2012 compared to the same period in 2011, after having been down in the first six months of the year. Value investor Joel Greenblatt initiated a position in Bruker between July and September (check out Greenblatt's favorite stocks). Bruker trades at 24 times trailing earnings, and even though last quarter was a strong improvement we think that it’s probably best to watch the stock for now and wait for continued improvements before buying.