Insider Buying Report, Research

Insider Buying Report: 4/19/16

The Insider Buying Report highlights those stocks that are rated highest in terms of Insider Buying for the past week.

Corporate insiders are often considered the “smart money” by Wall Street. For example, the research firm of Ned Davis Research reports that corporate insiders tend to be “relatively bullish at lows and relatively bearish at tops.”

In addition, in his book, Investment Intelligence from Insider Trading, Nejat Seyhun, who just happens to be a leading researcher in the field of insider buying and selling, illustrated that when top executives bought large amounts of his/her company’s stock, the stock outperformed the broad market by +8.9% over the next 12 months. And given that the long-term average annual return for the stock market has been +9.5% over the past 70 years, this means that stocks with heavy insider buying possess returns that are 93.7% better than the market itself. And then on the other hand, when an insider sold large amounts of his/her stock, Mr. Seyhun found that the stock underperformed the market by -5.4%, which is nearly 60% less than the market returns.

Do Insider Ratings Really Matter?

We certainly think so, but sometimes it is best to let the numbers do the talking. Below is a table showing the average annualized returns for each rating category, as determined by historical testing performed by one of the country’s largest independent institutional research firms.

Insider Ratings

SoTM
Insider
Rating

SoTM
Insider
Description

Average
Annualized
Return
4 Heavy Buying +27.73%
3 Light Buying +14.94%
2 Neutral +9.86%
1 Light Selling +6.16%
0 Heavy Selling +1.20%


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This Week’s Insider Buying Report

Below is a table highlighting a handful of the stocks rated 4.0 as the date of the report. This is not a complete listing and the table below is NOT a list of stocks that we recommend buying now. To be alerted when we make a move in the Insider Portfolio be sure to take a free trial.

The Insider Buying Report
For April 19, 2016

Company Symbol Industry Insider Rating Last Week
Americas Car-Mart Inc CRMT Automotive Retail Heavy Buying Heavy Buying
Advanced Energy Industries Inc AEIS Semiconductor Equipment Heavy Buying Heavy Buying
Sears Holdings Corp SHLD Department Stores Heavy Buying Heavy Buying
PICO Holdings Inc PICO Multi-Sector Holdings Heavy Buying Heavy Buying
Pennymac Finl Svcs Inc PFSI Thrifts & Mortgage Finance Heavy Buying Heavy Buying
Cara Therapeutics Inc CARA Biotechnology Heavy Buying Heavy Buying
Taubman Centers Inc TCO Retail REITs Heavy Buying Heavy Buying
GSV Capital Corp GSVC Asset Management & Custody Banks Heavy Buying Heavy Buying
Gain Capital Holdings Inc GCAP Specialized Finance Heavy Buying Heavy Buying
Aarons Inc AAN Homefurnishing Retail Heavy Buying Heavy Buying

 

Disclosure:
At the time of publication, the editor and/or affiliated companies own long or short positions in the following companies: None

Positions may be bought or sold while this publication is in circulation without notice.


Would like to know when any of these stocks are going to be added to our SOTM Insiders Portfolio this week? If so, be sure to treat yourself to a Monthly Subscription. The portfolio was up +47.25% in 2013, and has more than doubled the S&P 500 since inception!


The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors of StateoftheMarkets and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Stocks should always consult an investment professional before making any investment.

Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided.

The analysis provided is based on both technical and fundamental research and is provided “as is” without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

The information contained in our websites and StateoftheMarkets publications is provided by Ridge Publishing Co. Inc. (Ridge). One of the principals of Ridge, Mr. David Moenning, is also President and majority shareholder of Heritage Capital Management, Inc. (HCM) a Chicago-based money management firm. HCM is registered with the U.S. Securities and Exchange Commission as an investment adviser. HCM also serves as a sub-advisor to other investment advisory firms. Ridge is a publisher and has not registered as an investment adviser. Neither HCM nor Ridge is registered as a broker-dealer.

Employees and affiliates of HCM and Ridge may at times have positions in the securities referred to and may make purchases or sales of these securities while publications are in circulation. Editors will indicate whether they or HCM has a position in stocks or other securities mentioned in any publication. The disclosures will be accurate as of the time of publication and may change thereafter without notice.

The performance of the Insider Ratings are linked monthly price changes of equal weighted hypothetical portfolios consisting of those stocks with the indicated SOTM Insider Rating assuming monthly rebalancing zero transaction costs. Results do not include dividends and are from the time period 3/3/1992 through 9/28/2008.

The S&P 500 is a stock market index containing the stocks of 500 large-cap corporations, most of which are US companies. The index is the most notable of the many indices owned and maintained by Standard & Poor’s, a division of McGraw-Hill. S&P 500 is used in reference not only to the index but also to the 500 companies that have their common stock included in the index.

Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results.

© 2016 StateoftheMarkets.com – StateoftheMarkets.com does not provide investment advice. All rights reserved.

About the Author

Donald B. Moenning is the head of equity research at Heritage Capital Management, a Chicago-based investment management firm founded in 1989, as well as StateoftheMarkets.com. Don holds degrees in Economics and Business Leadership from the University of Puget Sound, lives in Denver, Colorado, and is an avid snowboarder.