5 Consumer Services Stocks Insiders Are Buying

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 their companies’ 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 five consumer services stocks made the list:

Security

Net Number of Buys

No.  of Shares Bought

Total Value

Market Cap ($million)

Ruby Tuesday (NYSE: RT  )

6

216,982

$1,600,000

$566

Royal Caribbean Cruises (NYSE: RCL  )

5

21,350

$577,000

$5,861

The Cheesecake Factory (Nasdaq: CAKE  )

2

3,500

$98,000

$1,525

Stewart Enterprises (Nasdaq: STEI  )

1

2,500

$19,000

$552

International Speedway (Nasdaq: ISCA  )

1

141

$4,000

$1,203

Source: Capital IQ, a division of Standard & Poor's, as of August 5, 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 Ruby Tuesday made six open-market purchases worth a whopping $1,600,000, while one insider buy at International Speedway was worth only $4,000. Both are bullish signs, but the purchase of Ruby Tuesday, which missed earnings expectations and guided its fiscal year down last month, looks more promising. What's more, none of these stocks made the screen on June 30.

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:

Fool contributor Cindy Johnson does not currently own shares of any stock in this story. Motley Fool newsletter services have recommended buying shares of International Speedway. 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.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 1535404, ~/Articles/ArticleHandler.aspx, 4/16/2014 1:09:54 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement