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Bullish Insiders: 9 Profitable Stocks With Insider Buying

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If you're an investor searching for profitable companies with the bullish sentiment to back it up, you may be interested in the following.

We screened a universe of stocks with market caps over $300 million that appear more profitable than their industry peers based on the following profit margins:

TTM gross margin: This metric tells us the percentage of a company's revenue left after paying all production expenses. Costs include overhead, payroll, and taxation. ((revenues – cost of goods sold) / Revenue ) *100 = Gross Margin %

TTM operating margin: This tells us the percentage remaining after all operating expenses are paid. Operating expenses include supplies, repairs, research and development, and depreciation. (Operating Income / Net Operating Revenue) *100 = Operating Margin %

TTM pre-tax margin: A company's earnings before taxes. This incorporates all of the expenses associated with business excluding taxes. It can help to determine the overall operating efficiency of the firm. (Net profit before taxes / net sales) *100 = Pre-tax Margin

Companies with higher margins are taking a greater percentage of sales as profits, and they have tighter control over their cost structure.

The list
To refine the quality of the list, we searched among the profitable companies for significant levels of net insider buying in the past six months.

Insiders know more about their company than anyone else, and if they are using their own money to buy up company stocks it is probably a good idea for investors to pay close attention.

Insiders think these profitable companies have more upside than downside -- do you? (Click here to access free, interactive tools to analyze these ideas.)

1. Center Bancorp (Nasdaq: CNBC  ) : Operates as the holding company for Union Center National Bank that provides various banking services to individual and corporate customers in Union and Morris counties, New Jersey. Over the last six months, insiders have been net buyers of 474,584 shares, which represent about 3.93% of the company's float of 12.09M shares. TTM gross margin at 71.26% vs. industry average at 70.56%. TTM operating margin at 44.39% vs. industry average at 39.33%. TTM pre-tax margin at 30.6% vs. industry average at 22.66%.

2. Saul Centers (NYSE: BFS  ) : Operates as a real estate investment trust in the United States. Over the last six months, insiders have been net buyers of 196,636 shares, which represent about 2.46% of the company's float of 7.99M shares. TTM gross margin at 43.6% vs. industry average at 38.43%. TTM operating margin at 43.6% vs. industry average at 37.63%. TTM pre-tax margin at 18.11% vs. industry average at 15.25%.

3. ITT Educational Services (NYSE: ESI  ) : Offers postsecondary-degree programs in the U.S. that provide diplomas as well as associate's, bachelor's, and master's degrees. Over the last six months, insiders have been net buyers of 374,000 shares, which represent about 2.08% of the company's float of 17.96M shares. TTM gross margin at 65.67% vs. industry average at 52.44%. TTM operating margin at 35.21% vs. industry average at 21.39%. TTM pre-tax margin at 35.28% vs. industry average at 18.57%.

4. Republic Services (NYSE: RSG  ) : Provides nonhazardous solid waste collection, transfer, and disposal services in the United States. Over the last six months, insiders have been net buyers of 1,732,695 shares, which represent about 0.57% of the company's float of 304.14M shares. TTM gross margin at 40.86% vs. industry average at 40.29%. TTM operating margin at 19.57% vs. industry average at 14.46%. TTM pre-tax margin at 11.09% vs. industry average at 10.92%.

5. Peoples Federal Bancshares (Nasdaq: PEOP  ) : Operates as a holding company for Peoples Federal Savings Bank that provides financial services to individuals and small businesses. Over the last six months, insiders have been net buyers of 31,259 shares, which represent about 0.53% of the company's float of 5.94M shares. TTM gross margin at 79.4% vs. industry average at 62.57%. TTM operating margin at 34.6% vs. industry average at 33.67%. TTM pre-tax margin at 22.09% vs. industry average at 14.06%.

6. Clearfield (Nasdaq: CLFD  ) : Clearfield manufactures, markets, and sells telecommunications equipment and products in the United States. Over the last six months, insiders have been net buyers of 48,000 shares, which represent about 0.52% of the company's float of 9.31M shares. TTM gross margin at 42.67% vs. industry average at 36.67%. TTM operating margin at 10.43% vs. industry average at 9.91%. TTM pre-tax margin at 10.94% vs. industry average at 10.67%.

7. Solar Capital Ltd. (Nasdaq: SLRC  ) : Solar Capital Ltd. is a business development company specializing in investments in leveraged companies, including middle market companies. Over the last six months, insiders have been net buyers of 115,000 shares, which represent about 0.41% of the company's float of 27.91M shares. TTM gross margin at 66.49% vs. industry average at 45.23%. TTM operating margin at 66.49% vs. industry average at 35.8%. TTM pre-tax margin at 39.31% vs. industry average at 25.21%.

8. Access National Corp. (Nasdaq: ANCX  ) : Operates as the bank holding company for Access National Bank that provides commercial credit, deposit, and mortgage services to middle market businesses and associated professionals primarily in the greater Washington, D.C., metropolitan area. Over the last six months, insiders have been net buyers of 23,825 shares, which represent about 0.39% of the company's float of 6.09M shares. TTM gross margin at 85.79% vs. industry average at 71.62%. TTM operating margin at 48.04% vs. industry average at 39.35%. TTM pre-tax margin at 22.71% vs. industry average at 22.65%.

9. White River Capital Inc. (NYSE: RVR  ) : Engages in specialized indirect auto finance business. Over the last six months, insiders have been net buyers of 6,214 shares, which represent about 0.24% of the company's float of 2.54M shares. TTM gross margin at 49.24% vs. industry average at 32.36%. TTM operating margin at 48.25% vs. industry average at 30.3%. TTM pre-tax margin at 42.04% vs. industry average at 24.73%.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research. List compiled by Eben Esterhuizen, CFA.

Kapitall's Eben Esterhuizen and Rebecca Lipman do not own any of the shares mentioned above. Insider data sourced from Yahoo! Finance, profitability data sourced from Fidelity.

Motley Fool newsletter services have recommended buying shares of Republic Services. 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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10/21/2016 4:00 PM
ANCX $26.61 Up +0.91 +3.54%
Access National CAPS Rating: ****
BFS $63.76 Down -0.45 -0.70%
Saul Centers CAPS Rating: No stars
CLFD $17.95 Down -0.25 -1.37%
Clearfield CAPS Rating: **
CNBC.DL $0.00 Down +0.00 +0.00%
Center Bancorp CAPS Rating: **
ESINQ $0.02 Down +0.00 +0.00%
ITT Educational Se… CAPS Rating: **
PEOP.DL $0.00 Down +0.00 +0.00%
Peoples Federal Ba… CAPS Rating: No stars
RSG $49.93 Down -0.05 -0.10%
Republic Services CAPS Rating: *****