Five Stocks Insiders Are Buying in 2011

Academic studies have shown that insider trading is most profitable when several insiders buy around the same time. A study by University of Illinois professor Josef Lakonishok and his student Inmoo Lee shows that insider purchases generate more than 7 % per year in excess returns above index funds when there are several insiders purchasing. Last week we let you know about one company with insider purchases. Hercules Technology Growth Capital Inc (HTGC) closed at $10.36 the Friday before we reported the insider purchase. During the past week the stock increased by 4.3% beating the S&P 500 index, which increased by 1.1%. This is the fifth week in a row our list of insider purchases has beaten the S&P 500 index. Seventeen of the 22 stocks that made our list managed to beat the S&P 500 index.

Insider Monkey, your source for free insider trading data, compiled the list of companies with at least 3 insiders buying with the latest purchase made in late November. Here are the most recent stocks insiders are buying like crazy:

1. Winmark Corp (WINA): Winmark Corp insiders have been buying since December 22nd. The stock closed at $33.16 last Friday.

2. Trailer Bridge Inc (TRBR): Trailer Bridge insiders have been both buying and selling around $3. Douglas E. Schimmel purchased 30,000 shares at $2.91 on Thursday. The stock closed at $2.94 on Friday.

3. Cogent Communications Group Inc (CCOI): There have been recent insider purchases at Cogent Communications around $14 per share. On Friday the stock closed at $13.74- less than what the insiders paid for it.

4. Diamond Foods Inc (DMND): This stock had significant insider purchases 3 months ago when it was trading around $41. More recently Diamond Foods’ Chairman and CEO Michael J Mendes purchased additional shares below $52. On Friday, the stock closed at $52.30.

5. EQT Corp (EQT): There are recent insider purchases in EQT Corp. The largest transaction was two months ago at $38.38, recent transactions occurred below $45. On Friday, the stock closed at $45.62.