A number of empirical studies on insider trading show that retail investors who mimic insider buying activity can beat the market, and purchases made by prominent hedge funds have even greater upside. According to our research at Insider Monkey, the best picks of the best hedge funds outperform the S&P 500 by 18 percentage points a year over the long-term.
You can find coverage of the latest hedge fund activity by following that link, and in that same light, let’s take a look at some of the most important insider buys of the past few days.
Early last week, two directors at COMMUNITYONE BANCORP (NASDAQ:COB) bought shares of the company: Austin A. Adams purchased 255 shares at $7.35 each and John Bresnan bought in two separate times at trading prices of $7.35 and $8.17 a pop. The small-cap banking company recently saw an important U.S. District Court case dismissed late last month, and shares are up 17.6% over the past three months.
The recently-IPOed Cherry Hill Mortgage Investment Corp (NYSE:CHMI) saw CIO Jay Lown snatch up about $75,000 worth of the stock, and CFO Martin Levine built a $103K position. These trades are particularly interesting because Ken Griffin’s Citadel holds about 5% of the company, and Daniel Lewis’ Orange Capital owns 7.3%. Shares of Cherry Hill rose by nearly 3% last Friday.
Perhaps the biggest move of the week was made by BlackBerry Ltd (NASDAQ:BBRY) co-founder Michael Lazaridis, who upped his stake in the smartphone maker to 8%. Together with Douglas Fregin, the two expressed their interest to take the company private. It’s worth noting that Lazaridis and Fregin are reportedly not connected with Prem Watsa and Fairfax Financial’s buyout proposal for BlackBerry.
While continued volatility is to be expected as management weighs its “strategic alternatives,” this stock offers obvious upside for anybody who thinks Watsa and Fairfax’s initial bid will stick. The presence of recent competition from Lazaridis and Fregin indicates that the billionaire probably won’t be able to lower his offering price below $9 a share.
A couple EOG Resources Inc (NYSE:EOG) insiders, meanwhile, bought stock at $174.59 a piece. Since the purchases, shares of the oil and gas E&P have risen to near the $179 mark. The insiders are E&P Executive VP Lloyd Helms and COO Gary Thomas; this is Helms’ first buy over the past two years, while the latest move marks Thomas’ fifth purchase since 2012.
Last but certainly not least, Director Brent Longnecker and COO/CFO Chad Braun of AmREIT Inc (NYSE:AMRE) took part in some moderate buying last week. Both transactions mark the continuation of bullish insider activity at the retail REIT over the past few years, and although shares are nearly flat year-to-date, AmREIT has paid a cash dividend in five consecutive quarters. At current prices, the dividend represents a yield of 4.6%.