Five Stocks Insiders Are Buying Like Crazy

Generally, insiders have an edge over other investors because insiders know more about their companies than do outsiders. That’s why insiders aren’t allowed to trade based on material non-public information. Most insiders don’t break the law, but some insiders push the envelope and trade on information that are in the gray area. Other insiders are great analysts and they know when to trade by using public information, which is perfectly legal. So it may be possible to beat the market by imitating all insiders’ purchases. However, insider trading is generally not a profitable strategy unless several insiders are purchasing around the same time. Academic studies have shown that insider purchases outperform the index fund by more than 7% per year when there are several insiders buying.

For the past months, Insider Monkey, your source for free insider trading data, has been compiling the list of stocks that several insiders are buying like crazy.   Here’s the list of 5 stocks we published last month and how they performed since.

1. TranSwitch Corp (TXCC): TranSwitch went up incredibly since our last report on March 17. TXCC rallied until it climbed to $5.50 on April 11th, making its return for Insider Monkey as high as 106%! Then, it leveled off, but is still up 52%.

Town Sports International Holdings, Inc. (NASDAQ:CLUB)

2. Town Sports Intl (CLUB): Town Sports continued to climb up last month. We initially reported on insider purchases at CLUB in November. The stock gained more than 80% since then. Since our last report in March, the stock also performed well and gained 20.8%. There have been repeated insider purchases in CLUB since November. The stock appreciates as consumer sentiment and spending improves.

3. Ligand Pharma (LGND): Imitating the substantial insider purchases we reported paid off. The stock rose 11% in the week following the latest insider buying and then pulled back. LGND jumped again by 6.25% during the last seven trading days, beating the market averages. Overall, the stock gained more than 10% since March 17th.

4. Exar Corp (EXAR): EXAR underperformed the market by around 3 percentage points since we reported insider purchases on March 17th. However, insider purchases went on last month. EXAR surged 7.8 % during the five days following Soros’ latest purchases on April 1st, before leveling off. It returned as much as 15% for investors who monkeyed George Soros’s large transactions last September. George Soros has been buying this stock, but the stock keeps disappointing investors who imitated Soros’ purchases.

5. Central European Distribution Corp (CEDC): CEDC declined more than 9% since our last report. The latest transactions we reported were above the $12.5 level, and another insider purchased 10,000 shares at $10.53 this month. After the recent insider purchase, the stock seemed to stop its downward trend and stabilize.

Overall, three of our stock picks beat the market. An equal weighted portfolio of these five stocks would have returned 15% in one month.  Only CEDC had negative returns. Of course, this is just a very small sample and does not prove or disprove the credibility of monkeying insider purchases. Insider Monkey, your source for free insider trading data, will keep sharing recent academic studies with you, so that you can do your own research. We will keep providing updates on stocks insiders buy like crazy, although it might be better to follow them in real-time if one is monkeying insider transactions.

Here are the 7 stocks insiders were buying during the last couple of weeks:

Adcare Health Systems (ADK): Insiders are buying modest amounts of ADK during this month. The latest insider transactions were at $4.80 and $4.75 per share. After it rallied in March, the share price has not been moving that much following the insider purchases. The stock closed at $4.91 on Thursday, declining 0.81% in April.

Presidential Life Corp (PLFE): There were several insider purchases since the end of March. Following the insider purchase at $9.37 per share on March 30, PLFE rose 10.25% in a week. The insiders took advantage of pullbacks last week, and kept buying the stock. The latest insider purchase last week was at $10.18. Chuck Royce owns around 1% of PLFE’s outstanding shares. Royce has been investing successfully in small cap stocks for nearly 40 years.

Central European Distribution Corp (CEDC): This was one of the stocks we recommended in our report last month. In addition to a large purchase by William S. Shanahan last month, Eugene Marek Forysiak bought 10,000 shares at $10.53 on April 12th. Since this purchase, the stock stopped its down trend and jumped more than 5%. The stock price is still down 50% compared to its mid-February levels. David Dreman had $29 Million in CEDC at the end of December. Rob Citrone’s Discovery Capital, Phillippe Jabre’s Jabre Capital, and Leon Cooperman’s Omega Advisors had smaller positions in this stock as well.

Nevada Gold & Casinos (UWN): Insiders have been buying since the middle of March when the shares were around $1.09, and the stock started an uppward trend in the beginning of April. However, the insiders kept on buying over the $1.40 level during the past week. This isn’t a very liquid stock though.

Federal Signal Corp (FSS): There were several insider purchases reported since March 21.  The stock rose 11% in a day following two separate insider purchases at $5.66 per share. There were four other insiders buying this stock during the last couple of weeks.  The latest insider transaction was at $6.51 on April 11, and the shares are currently trading around that level. Chuck Royce also owned 1.5% of this stock’s outstanding shares at the end of December.

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 Top Reasons For Getting Fired

The 3 Best States to Start an LLC

10 Jobs That Allow You to Travel

7 High-Paying Jobs You Can Do From Home

12 Best Cities to Shop in USA

10 Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

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!