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When insiders buy shares on the open market, their companies could enjoy bullish times ahead. Corporate insiders often have the inside track on their companies' prospects, and many of them get paid largely in stock options or restricted shares. Besides, insiders probably wouldn't risk plowing too much of their own money into their own company's stock -- reducing their portfolio's diversity, and increasing its risk -- unless they thought the stock might rise.
With that in mind, I screened for companies where at least one insider made an open-market buy in the last 30 days. These six media stocks made the list:
Net Number of Buys
# of Shares Bought
Market Cap ($ million)
|Pandora Media (NYSE: P )||4||99,629,561||$1,150,000||$3,201|
|Rentrak (Nasdaq: RENT )||4||46,756||$250,000||$213|
|MDC Partners (Nasdaq: MDCA )||2||30,000||$160,000||$523|
|Lions Gate Entertainment (NYSE: LGF )||5||64,321||$72,000||$922|
|PRIMEDIA (NYSE: PRM )||1||1,950||$14,000||$316|
|Nexstar Broadcasting Group (Nasdaq: NXST )||1||750||$5,000||$240|
Source: Capital IQ, a division of Standard & Poor's, as of June 30, 2011.
When it comes to the number and total value of insider open market buys, more can be better; I've sorted this table accordingly. Insiders at Pandora Media made four open-market purchases worth a total of $1.15 million, while a Nexstar insider spent just $5,000 on a single open-market buy. Both are bullish signs, but the Pandora purchases look a lot more promising.
Insider buying signals that someone who should be in the know is betting that the stock will rise. You can use this list of recent insider purchases as a starting point for further research -- or a good reason to make a contrarian play.
Are these insiders right? To help you find out, The Motley Fool recently introduced our free My Watchlist feature. Get up-to-date news and analysis by adding companies to your Watchlist now: