Studies show that, statistically, stocks bought by insiders beat the S&P index. Of course, not every stock meeting this criteria beats the market and no investor can buy shares in every single one of these companies in any case. As a result, even investors who are interested in following insider trading activity have to review filings as they come up to see if the stocks make sense in terms of value as well. Here are five stocks that insiders bought recently:
$730 million market cap registry services company Web.com Group, Inc. (NASDAQ:WWWW), had two Board members buy the stock on December 13th at about $14 per share. Consensus insider purchases, it turns out, are a particularly bullish signal on average. Web.com’s revenues have been rising rapidly, but so have costs and the result last quarter was a larger operating loss than in Q3 2011. Columbus Circle Investors, managed by Donald Chiboucis, had not owned the stock at the beginning of July but bought 840,000 shares over the course of the third quarter (see more stock picks from Columbus Circle Investors). However, the stock is a popular short with over 30% of the outstanding shares held short as of the most recent data. Web.com’s growth- and fairly cheap valuation, in terms of expected 2013 earnings- have our attention, but we think it’s more of a “watch list” pick at the moment due to the operating losses. See more of our thoughts on Web.com.
A member of the Board of Directors at another Internet company, ValueClick Inc (NASDAQ:VCLK), bought 3,500 shares through his retirement accounts (and his spouse’s retirement account also bought shares) at prices of around $19.40. ValueClick’s revenue and earnings have been up; though comparisons to a year ago aren’t quite fair as the company has been acquisitive, earnings per share also seem to have been increasing over the course of 2012. At 17 times trailing earnings, the marketing services, media, and content provider seems to be priced about even with its peers. Read our analysis of ValueClick.