When insiders buy shares on the open market, their companies could enjoy bullish times ahead. Corporate insiders often have the inside track on their company's 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 past 30 days. These eight materials stocks made the list:
|
Security |
Net Number of Buys |
No. of Shares Bought |
Total Value |
Market Cap |
|---|---|---|---|---|
|
Texas Industries |
4 | 724,288 | $28,750,000 | $1,130 |
|
Valhi |
10 | 136,305 | $6,690,000 | $7,162 |
|
Kraton Performance Polymers |
3 | 21,200 | $1,090,000 | $1,275 |
|
Titanium Metals |
1 | 49,525 | $875,000 | $3,422 |
|
EnPro Industries |
1 | 2,250 | $101,000 | $1,026 |
|
Esterline Technologies |
1 | 1,235 | $100,000 | $2,503 |
|
Martin Midstream Partners |
4 | 706 | $27,000 | $798 |
| Handy & Harman | 1 | 1,000 | $14,000 | $219 |
Source: Capital IQ, a division of Standard & Poor's, as of July 21.
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 Texas Industries made open-market purchases worth almost $29 million, while a Handy & Harman insider spent a much lesser $14,000 on open-market buys. Both are bullish signs, but the Texas Industries purchase looks more promising. Texas Industries and Kraton Performance Polymers are repeats from when I ran the screen a month ago.
Foolish takeaway
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 as a reason to make a contrarian play.
Are these insiders right? To help you find out, The Motley Fool recently introduced a free My Watchlist feature. You can get up-to-date news and analysis by adding companies to your Watchlist now:
