Insider buying can be a bullish indicator for a stock and provides another piece of information for investors to weigh when doing research. Company executives, board members, and shareholders with stakes exceeding 10% must notify the SEC within two days of their share purchases (and sales) in a Form 4 filing. Each week, I take a look at some of the largest insider purchases in search of opportunities with this often-positive indicator.
|
Company |
Market Cap |
Number of Shares Purchased |
$Value Shares Purchased |
CAPS Rating (out of 5) |
|---|---|---|---|---|
|
MannKind
|
$977 million | 700,000 | $5.92 million | ** |
|
Lincoln Educational Services |
$345 million | 306,147 | $4.65 million | ***** |
|
Huntington Bancshares |
$4.93 billion | 163,400 | $1.03 million | ** |
Sources: Barron's; Motley Fool CAPS.
Alfred Mann, the founder and CEO of biotech company MannKind, purchased more shares for $8.46 each after a similarly sized purchase back in October. The purchase was tied to a financing arrangement announced in August under which an entity controlled by Mann agreed to cancel an equivalent amount of debt in exchange for shares. Watch for MannKind shares to pop or drop this week, because the Food and Drug Administration is scheduled to announce its decision on the company's Afrezza drug for diabetes by Wednesday.
Two directors at for-profit career college Lincoln Educational Services bought shares at $15.19 each. Like other companies in the for-profit education sector, 2010 hasn't been the best year for Lincoln's stock. With increased government scrutiny of loan repayment rates, stocks in the education sector cratered earlier this year. The buyers must be expecting a rosier 2011.
Nearly 20 officers and board members at Huntington Bancshares bought shares at $6.30 each on Dec. 17 as part of a public equity offering. The regional bank sold shares and issued debt to fund the repayment of preferred shares it issued under the government's Troubled Asset Relief Program (TARP) during the financial crisis.
While Fools should always do their own due diligence, and not blindly follow the insiders, insider buying can point to good places to look for opportunities. To learn more about the stocks The Motley Fool is buying, click here to download a free report, "5 Stocks The Motley Fool Owns-- And You Should, Too."
