Multiple Insiders Have Bought Informatica Corporation (INFA) and More

Page 1 of 2

The principles of diversification conclude that it is unwise to accumulate too much company-specific risk. This is why investors are often advised to buy stocks in different industries or sectors, and is also why company insiders are normally expected to sell rather than buy shares. When insiders to buy stock, it therefore signifies a certain level of confidence in the company. This is an explanation for why insider purchases tend to be bullish signals, with consensus insider purchases- buying by multiple insiders- outperforming the market on average. Read our analysis of studies on consensus insider purchases. As such we can think of stocks bought by multiple insiders as similar to the results of a stock screen: a source of prospects for potential investment if further research also suggests they are good buys. Here are five stocks that our database of insider trading filings shows have been bought by multiple insiders in the last month:

LONE PINE CAPITAL

Multiple insiders have bought shares of Informatica Corporation (NASDAQ:INFA), a $3.9 billion market cap data software and services company. Informatica’s stock price is down 27% in the last year, matching the decline in earnings which took place in its most recent quarterly report compared to the same period in the previous year. The financial community is already prepared for a recovery- the trailing and forward P/Es are 43 and 22 respectively- but apparently many company insiders believe that the stock has even more of an upside. Billionaire Stephen Mandel’s Lone Pine Capital initiated a position of 1.9 million shares in Informatica during the fourth quarter of 2012 (see Mandel’s stock picks).

Firstmerit Corp (NASDAQ:FMER), a holding company whose banks operate in the Midwestern United States (most of its locations are in Ohio), is another stock where we have tracked consensus insider buying. The market capitalization of $1.7 billion places Firstmerit right at the book value of its equity. This is another stock which has fallen in the last year against a rising market, and combined with an increase in net income the earnings multiples look fairly low as well. With a dividend yield of over 4%, going by current prices and recent payments, it could be worth taking a closer look at the company.

An extremely high dividend yield can be found at Two Harbors Investment Corp (NYSE:TWO). The real estate investment trust has generally made payments of 40 cents per share (except for some instability in recent quarters) and even a small decrease in that return going forward would leave the yield above 10%. Real estate investment trusts often pay high yields as they comply with regulations requiring them to distribute a large share of taxable income to shareholders in order to preserve their tax treatment. Two Harbors invests in mortgage backed securities and other real estate loans.

Page 1 of 2
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 9 Most Dangerous Countries for Tourists to Visit

Reign of Terror: The 10 Most Ruthless Politicians in History

On the Move: The 10 Fastest Growing Businesses in 2015

Fast Money: The 10 Highest Paying Fast Food Restaurants

Mixing It Up: The 14 Best Music Mashups of 2014

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

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!