Should We Follow These Leaders? UnitedHealth Group Inc. (UNH), Adobe Systems Incorporated (ADBE) and More

Page 1 of 2

Investors are always hard-pressed to find ways to outperform the market averages, as stocks are generally priced at their appropriate price.  However, one screening tool that has proven to be effective in determining whether a stock is moving higher is insider buying, for one simple reason: they buy stocks, just like us, to make more money. In addition, they arguably have the best view of the company, being a part of the day-to-day operations, and may have a large investment of their own that they like to see increase in value. Below are a couple stocks with strong insider buying.

Health care giant UnitedHealth Group Inc. (NYSE:UNH) out of Minnesota is simply a giant, with trailing twelve months revenue exceeding $110 billion and a market capitalization in excess of $55 billion. The company has been range-bound the past year with the current stock price virtually in the middle of its $50.32-$60.75 price range. Board director Rodger Lawson seems to think there is more upside ahead, filing an SEC Form 4 on Jan. 22 showing the purchase of 2,000 shares on the open market at $54.42, equating to almost $110,000 worth of stock.

UnitedHealth Group IncConsiderable insider buying is always encouraging, and when we look deeper into the company’s fundamentals the valuations look appealing. Trading at barely half its sales to enterprise value and at a discount to its expected growth rate, while trouncing those estimates in three of the last four quarters, has me thinking that “the Street” is underappreciating UNH. Add in its consistently growing 1.5% dividend yield, which currently stands at a paltry 15% payout ratio, and investors can confidently expect that to continue to be raised in the near future. Competitor Aetna Inc. (NYSE:AET) is worth a look as well to potentially split one’s position and take out company-specific risk. The company has similarly attractive valuations, while beating the consensus analyst estimates the past two quarters, displaying that it is currently operating well. Add in its 1.6% dividend yield and paltry 13% payout ratio and one can reasonably believe, like with UNH, that the dividend will be increased here again soon as well.

Diversified software giant Adobe Systems Incorporated (NASDAQ:ADBE) is most well-known for its Acrobat family of products. Since its founding just over 30 years ago, the company has become a juggernaut with well over $4 billion in annual sales and a market capitalization near $20 billion. The stock is sitting right near its $38.78 52-week high and one would think that now is the time to take some profits. Board director Amy Banse thinks otherwise, buying 5,000 shares on Jan. 16 at $38.06 per share, equating to almost $200,000 worth of stock. The stock operationally has performed well, either meeting or exceeding consensus analysts’ estimates the past four quarters while expecting greater than a 10% per annum growth rate for the next five years. The company does not pay a dividend though, which is discouraging to me, but with approximately $2 billion in net cash and healthy returns on equity exceeding 13%, Adobe is worth a look.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

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 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!