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 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

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations 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!