Insiders Have Bought Pepsi, Cheesecake Factory, and More

Page 1 of 2

It’s common for company insiders to talk up their company’s stock, but it’s less common for them to actually buy. This is because- in addition to the fact that rosy predictions are sometimes less than honest- by buying more stock an insider is increasing their exposure to company-specific events rather than diversifying their wealth as is predicted by economic theory. As a result actual purchases should signal a particularly confident insider rather than one who is casually buying the stock, and it turns out that stock bought by insiders do have a slight outperformance effect read our analysis of studies on insider trading). Of course it’s impossible to copy every insider purchase, but we like to take at least a brief look at significant buys so that investors can do more research on stocks that seem appealing. Here are five stocks insiders have bought recently:

RENAISSANCE TECHNOLOGIES

Shona Brown, a member of PepsiCo, Inc. (NYSE:PEP)’s Board of Directors, bought 1,000 shares of stock at an average price of $75.33. The global beverage and snack company reported high earnings growth in the fourth quarter of 2012 versus a year earlier, but sales were actually down slightly and the current trailing earnings multiple looks a bit high at 20. We would want to see revenue growth before considering a purchase. Renaissance Technologies, whose success since inception has made founder Jim Simons a multi-billionaire, bought 2.6 million shares of Pepsi last quarter (see more stock picks from Renaissance Technologies).

Two insiders bought shares of The Cheesecake Factory Incorporated (NASDAQ:CAKE) generally between $34 and $35 per share. Consensus insider purchases are particularly likely- though not certain- to be bullish signals (learn more about consensus insider purchases). While earnings per share were up 9% in Q4 from levels in the fourth quarter of 2011, this was primarily due to buybacks with revenue and net income rising only 2-3%. Cheesecake Factory also trades at 20 times trailing earnings and while it’s good that the company is returning cash to shareholders we would be skeptical of this valuation as well.

Find three more stocks insiders have been buying:

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 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!