Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Insiders See Big Things Ahead For These 3 Stocks

Page 1 of 2

The recent spike in volatility in the past few weeks has seen several stocks correcting significantly and a large number of them trading around their 52-week lows. Although buying spurts have emerged whenever the S&P 500 has broken down below the 1,900 mark, it hasn’t been sufficient to take the index past 2,000, a mark above which it has traded throughout the year before falling below in mid-August. At times like these, when insiders step in and buy the shares of their own companies, it really helps to restore investors’ confidence in the stock. Keeping that in mind, let’s take a closer look at three stocks that have recently seen strong insider buying activity. They are Dollar Tree, Inc. (NASDAQ:DLTR), Chemours Co (NYSE:CC), and Franklin Street Properties Corp. (NYSEMKT:FSP).

Real Estate and Brokers

Most investors can’t outperform the stock market by individually picking stocks because stock returns aren’t evenly distributed. A randomly picked stock has only a 35% to 45% chance (depending on the investment horizon) to outperform the market. There are a few exceptions, one of which is when it comes to purchases made by corporate insiders. Academic research has shown that certain insider purchases historically outperformed the market by an average of seven percentage points per year. This effect is more pronounced in small-cap stocks. Another exception is the small-cap stock picks of hedge funds. Our research has shown that the 15 most popular small-cap stocks among hedge funds outperformed the market by nearly a percentage point per month between 1999 and 2012. We have been forward testing the performance of these stock picks since the end of August 2012 and they have returned 118% over the ensuing 36 months, outperforming the S&P 500 Index by over 60 percentage points (read the details here). The trick is focusing only on the best small-cap stock picks of funds, not their large-cap stock picks which are extensively covered by analysts and followed by almost everybody.

Let’s start with discount retailer Dollar Tree, Inc. (NASDAQ:DLTR). On September 10, Conrad M. Hall, an Independent Director of the company bought 5,000 shares at a weighted average price of $66.20. Mr. Hall now owns 45,000 shares of Dollar Tree, Inc. (NASDAQ:DLTR) directly and 5,000 shares indirectly. Although shares of the company rose by 10%  during the first three months of the year, they remained flat during the second quarter and the recent declines in the market have now caused them to trade down by 6.56% year-to-date. Analysts at Credit Suisse downgraded the stock to ‘Underperform’ from ‘Neutral’ on September 8, and also reduced their price target to $60 from $70, which at current market price represents a potential 9.0% decline. Among the funds we cover, Charles Akre‘s Akre Capital Management was the largest shareholder of the company at the end of June, owning over 3.5 million shares.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

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 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!