December 06 2010 Tweet Email This
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Click Here NowAcademic 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. Insider Monkey compiled the list of companies with at least 3 insiders buying with the latest purchase made in late November.
Here are the seven stocks insiders are buying like crazy:
1. Bank of America (BAC): We reported significant insider trading in Bank of America three weeks ago. On Wednesday, a fourth director purchased 5,000 shares at $11.30. This is nearly 10% less than the price paid by previous insiders. We weren't enthusiastic about the previous purchases but we believe this is a better point to monkey insider buys.
2. Versar Inc. (VSR): This is a $30 Million company with several insider purchases over the past 3 months. The prices paid were as low as $2.60 per share at the end of September and as high as $3.25 on Wednesday. The daily transaction volume is less than 50,000 shares, so it doesn't seem to be a good stock to monkey.
3. Rimage Corp (RIMG): This is another stock we have covered three weeks ago, trading sideways since. It seems insiders are buying Rimage below $16 per share. The stock was trading above $18 at one point in October. A more recent insider purchase was at $15.35 on Tuesday.
4. Harris Interactive (HPOL): This is another micro cap stock where insiders are buying like crazy compared to the average trading volume. Unfortunately, the stock trades at $0.88 and the average daily volume is 34,000 shares. The average insider paid around $0.86 per share during the past month. The latest transaction, nearly 15,000 shares, was on Wednesday.
5. Jamba Inc (JMBA): Jamba Juice was very popular a couple of years ago with a market value within reach of $1 Billion. Today, the stock trades at $2.17 with a market cap of $130 Million. There were 3 different insiders purchasing over the past few months. The first purchase was on August 24th at $1.69. The latest transaction was on Tuesday at $2.04.
6. Citigroup Inc. (C): This is the second large bank with significant insider purchases. On November 3 insiders spent nearly $2.5 Million and bought Citigroup shares at prices around $4.30. These transactions, with the Bank of America purchases, imply that banking stocks are undervalued in general.
7. Buckeye Technologies Inc (BKI): An insider bought Buckeye shares at the end of August at $10.75. The stock closed at $20.26 yesterday. A second insider purchased on November 16th at $17.5 and the third insider purchased on November 22nd at $18.83. The stock increased by more than 7% in 10 days.
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More on this topic (What's this?) Bank of America Allegedly Foreclosing Fraudulently in Kentucky (naked capitalism, 11/11/10) More on BofA Employee Damaging Admissions re Failure to Convey Mortgage Notes (naked capitalism, 11/30/10) Insiders Head for the Exits (Wealth Daily, 11/23/10) Research or Insider Trading? A Guide (Phil's Stock World - Members S..., 11/29/10) Read more on Insider Trading, Bank of America at Wikinvest Sharing Is Cool Tweet Email ThisDo You Want More Profits? Wall St. Cheat Sheet Premium newsletter subscribers have been crushing the markets with winning stock picks.
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This post was written by:
Insider Monkey - who has written 5 posts on Wall St. Cheat Sheet.
Tags: Bank of America (BAC), Buckeye Technologies Inc (BKI), Bullish Insider Trading, citigroup c, Harris Interactive (HPOL), Insider Trading in Small Cap Companies, Jamba Inc (JMBA), Rimage Corp (RIMG), Versar Inc (VSR)
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