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

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 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

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

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!