The Stocks That Insiders Are Buying

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 Name

Market Cap

Number of Shares Purchased

Value Shares Purchased

CAPS Rating
(out of 5)

MannKind (Nasdaq: MNKD  ) $1.20 billion 700,000 $6.10 million **

Lawson Software

(Nasdaq: LWSN  )

$1.50 billion 689,200

$5.98

million

****
Lions Gate Entertainment (NYSE: LGF  ) $877 million 819,823 $5.33 million ***
Hain Celestial (Nasdaq: HAIN  ) $1.15 billion 86,600 $2.27 million ***

Sources: Barron's, Motley Fool CAPS.

The theme for this week's update is repeat purchases and the resurgence of activist investors such as Carl Icahn

Alfred Mann, founder and CEO of biotech MannKind, bought more shares of the company in advance of the FDA making a decision on the company's diabetes drug, Afrezza. MannKind's stock was down sharply this morning on news that the FDA wanted more clinical trials before approving the drug.

Icahn bought more shares of enterprise software provider Lawson Software, taking his stake in the company above 10%. He made his purchases following Lawson's disappointing earnings report, which gave him a chance to buy shares at a cheaper price. Icahn's investment funds also made more purchases of natural foods provider Hain Celestial, where he owns nearly 16% of the company's outstanding shares.  

Lions Gate Entertainment director Mark Rachesky bought shares in the company for $6.50 per share. Rachesky is the company's second-largest shareholder behind Icahn. When Icahn attempted to take control of the company, Rachesky supported Lions Gate management.

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 stocks The Motley Fool is buying, click here to receive a free report: "5 Stocks The Motley Fool Owns -- And You Should Too."  

Fool contributor April Taylor does not own shares of the companies mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On January 20, 2011, at 11:37 AM, trigdog wrote:

    Well, I wonder how Mr. Mann feels right now. I am long on MNKD myself (only 100 shares @8.20) and not feeling that bad about the CRL issued yesterday. I'm holding on to my shares, and still think that they will win an approval on their insulin drug sometime early next year. The flash crash of the stock price yesterday only underlines what I already knew, the market is rigged. The small guy has a slim chance of winning. I try not to be greedy and just pick up a few crumbs along the way. I know I won't get rich trading 100 share lots, but I won't go broke either.

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