Investing 101: Stocks on a Winning Streak With Insider Buying

Looking for high momentum stocks with bullish support from company insiders? If so, the following list may be of interest to you.

To help you identify the momentum in the stock market today, we have identified stocks with the following characteristics:

  • Net positive purchases from company insiders in the past six months
  • Winning streaks in the last month
  • Market cap over $300M

Insider buying
We searched for companies that have experienced high levels of net insider buying over the last six months. Company insiders, like managers and board members, are expected to know more about their company than anyone else. When they put their own money on the line for a company, they are demonstrating confidence in their company's future outlook.

Winning streak
For our purposes, we identify a winning streak as a persistence of days in which a stock recently outperformed the S&P 500 and little persistence in recently underperforming the S&P 500 benchmark.

To use these concepts, we ran a screen on recently "winning" stocks: those that have seen a persistence of days in which the stock beat the S&P 500 benchmark over the last month and little persistence in underperforming the S&P 500, i.e., long winning streaks and short losing streaks, as measured by a ratio of the longest winning streak to the longest losing streak.

Outperforming the index is considered a powerful signal of the company's strength. Stocks that win out the stock market may also be working off of a strong momentum that can persist for a long time.

The list
Although past performance is no guarantee of future results, winning streaks may indicate upward momentum and positive sentiment.

Now that you're armed with information, take a look at the list below and use it as a starting-off point in your own analysis.

Do you think their momentum will continue to benefit their market values? (Click here to access free, interactive tools to analyze these ideas.)

1. Zogenix (Nasdaq: ZGNX  ) : Engages in the development and commercialization of products for the treatment of central nervous system disorders and pain. Over the last six months, insiders were net buyers of 8,400,000 shares, which represents about 21.49% of the company's 39.09M share float. The stock's average daily alpha vs. the S&P500 index stands at 2.33% (measured close to close, over the last month). During this period, the longest winning streak lasted 11 days (i.e., the stock's daily returns outperformed the S&P 500 for 11 consecutive days). The longest losing streak lasted 5 days (i.e., a win streak / losing streak ratio of 2.2).

2. Kraton Performance Polymers (NYSE: KRA  ) : Kraton Performance Polymers,, through its subsidiary, Kraton Polymers LLC, produces styrenic block copolymers (SBC) for use in industrial and consumer applications worldwide. Over the last six months, insiders were net buyers of 957,100 shares, which represents about 3.49% of the company's 27.40M share float. The stock's average daily alpha vs. the S&P500 index stands at 0.89% (measured close to close, over the last month). During this period, the longest winning streak lasted 8 days (i.e., the stock's daily returns outperformed the S&P 500 for 8 consecutive days). The longest losing streak lasted 3 days (i.e., a win streak / losing streak ratio of 2.67).

3. support.com: Provides online care services for the digital home and small business primarily in North America. Over the last six months, insiders were net buyers of 299,467 shares, which represents about 0.77% of the company's 39.08M share float. The stock's average daily alpha vs. the S&P500 index stands at 1.16% (measured close to close, over the last month). During this period, the longest winning streak lasted 7 days (i.e., the stock's daily returns outperformed the S&P 500 for 7 consecutive days). The longest losing streak lasted 3 days (i.e., a win streak / losing streak ratio of 2.33).

4. Doral Financial (NYSE: DRL  ) : Provides a range of banking and financial services primarily in Puerto Rico and New York. Over the last six months, insiders were net buyers of 735,835 shares, which represents about 0.68% of the company's 108.52M share float. The stock's average daily alpha vs. the S&P500 index stands at 3.35% (measured close to close, over the last month). During this period, the longest winning streak lasted 9 days (i.e., the stock's daily returns outperformed the S&P 500 for 9 consecutive days). The longest losing streak lasted 2 days (i.e., a win streak / losing streak ratio of 4.5).

5. China Automotive Systems: Engages in the manufacture and sale of power steering systems and other component parts for the automotive industry in the People's Republic of China. Over the last six months, insiders were net buyers of 44,003 shares, which represents about 0.55% of the company's 8.06M share float. The stock's average daily alpha vs. the S&P500 index stands at 2.18% (measured close to close, over the last month). During this period, the longest winning streak lasted 5 days (i.e., the stock's daily returns outperformed the S&P 500 for 5 consecutive days). The longest losing streak lasted 2 days (i.e., a win streak / losing streak ratio of 2.5).

6. Unilife (Nasdaq: UNIS  ) : Over the last six months, insiders were net buyers of 293,760 shares, which represents about 0.52% of the company's 56.58M share float. The stock's average daily alpha vs. the S&P500 index stands at 1.05% (measured close to close, over the last month). During this period, the longest winning streak lasted 5 days (i.e., the stock's daily returns outperformed the S&P 500 for 5 consecutive days). The longest losing streak lasted 2 days (i.e., a win streak / losing streak ratio of 2.5).

7. Zhongpin (Nasdaq: HOGS  ) : Engages in the processing and distribution of meat and food products primarily in the People's Republic of China. Over the last six months, insiders were net buyers of 125,000 shares, which represents about 0.48% of the company's 26.10M share float. The stock's average daily alpha vs. the S&P500 index stands at 1.54% (measured close to close, over the last month). During this period, the longest winning streak lasted 6 days (i.e., the stock's daily returns outperformed the S&P 500 for 6 consecutive days). The longest losing streak lasted 2 days (i.e., a win streak / losing streak ratio of 3.0).

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, all other data sourced from Finviz.

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