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 often have significant exposure to the company's stock through options or restricted shares that are part of their compensation. 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 will 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 14 bank stocks made the list.
|
Security |
Net Number of Buys |
No. of Shares Bought |
Total Value |
Market Cap (Millions) |
|---|---|---|---|---|
|
Huntington Bancshares |
18 | 733,912 | $371,000 | $5,219 |
|
FirstMerit |
4 | 7,800 | $102,000 | $1,596 |
|
F.N.B. |
1 | 10,000 | $99,000 | $1,270 |
| First Citizens Bancshares | 2 | 445 | $83,000 | $1,886 |
|
Independent Bank |
2 | 2,123 | $70,000 | $569 |
|
Hudson City Bancorp |
3 | 12,878 | $66,000 | $4,345 |
|
First Niagara Financial Group |
2 | 2,051 | $40,000 | $3,786 |
|
SY Bancorp |
17 | 1,525 | $35,000 | $313 |
| Great Southern Bancorp | 4 | 1,684 | $32,000 | $246 |
| First Financial Bankshares | 1 | 1,000 | $32,000 | $1,013 |
| First Financial Bank | 10 | 1,836 | $31,000 | $933 |
| Citizens & Northern | 9 | 880 | $12,000 | $201 |
| First Merchants | 2 | 199 | $2,000 | $230 |
| German American Bancorp | 1 | 41 | $1,000 | $211 |
Source: Capital IQ, a division of Standard & Poor's, as of July 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 Huntington Bancshares made open-market purchases worth $371,000, while one insider buy at German American Bancorp was worth only $1,000. Both are positive signs, but the Huntington Bancshares purchase looks more promising.
The number of stocks that made the screen increased when I ran a screen covering the prior 30 days. That said, the value of the insider buys tended to be larger on the prior screen, ranging from $59,000 to $485,000. No stock made both lists.
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 a good 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:
