Insiders Have Bought BlackRock, Adobe, and More

Page 1 of 2

We’ve reviewed a number of studies on insider trading and have concluded that stocks bought by insiders narrowly outperform broader market indices (read more about studies on insider trading). Our impression is that this is because insiders’ pocketbooks are already dependent on the company, and so they should generally diversify their investments to avoid too much exposure to any company-specific events. Insider buys therefore signal that the stock’s prospects are believed to be so strong that they overcome this hurdle. Of course, investors shouldn’t buy every stock that insiders like- not that they can anyway- but we think that it can be useful to review these stocks and then do more research if they (or a similar company) turn out to be attractive buys. Here are five stocks that insiders have bought recently:

A member of the Board of Directors at BlackRock, Inc. (NYSE:BLK) bought $100,000 worth of the stock at $233.59 per share. The asset management industry in general has been performing very well recently, with BlackRock and many of its peers such as State Street Corporation (NYSE:STT) and Franklin Resources, Inc. (NYSE:BEN) reporting earnings growth rates of about 20% in their most recent quarter compared to the same period in the previous year. BlackRock’s trailing P/E is 17- slightly higher than these other companies we’ve mentioned- and we think that asset management could be a source of several potential value ideas. Read more of our thoughts on BlackRock and its peers.

VALUEACT CAPITAL

Amy Banse, a Board member at Adobe Systems Incorporated (NASDAQ:ADBE) and the head of Comcast Corporation (NASDAQ:CMCSA)’s Comcast Ventures, bought 5,000 shares of Adobe’s stock on January 16th. Adobe is a top pick at Jeffrey Ubben’s ValueAct Capital; that fund had $1 billion invested in the stock at the end of the third quarter of 2012 (check out more of Ubben’s stock picks). In the third quarter, Adobe’s revenue was flat from a year earlier and operating income was actually down slightly, so we think that the current valuation- the trailing and forward P/Es are both in the 20s- may actually be too high.

Jack Daniels and Southern Comfort manufacturer Brown-Forman Corporation (NYSE:BF.B), which owns other brands of alcoholic beverages as well, had its chief production officer buy just over 2,000 shares of the stock at an average price of $63.44. Brown-Forman is another company where we’re not wild about the pricing: the stock trades at 25 times trailing earnings, with moderate earnings growth in its last quarterly report compared to the same period in 2011 but flat sales. Comparable companies were generally valued at over 20 times trailing earnings as well. Chilton Investment Company, managed by billionaire Richard Chilton, was buying the stock in the third quarter (find Chilton’s favorite stocks).

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

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

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!