Earnings season has arrived, and investors are on the hunt for names that are likely to beat analyst expectations. After all, quarterly earnings reports are big movers for most stock prices. If earnings exceed expectations, a higher stock price will usually be the reward.
So, how can we find companies that may be poised to outperform? One technique is to follow company insider trends.
Company insiders, such as members of the board and upper management, can purchase company stock if they are optimistic on their companies' outlook. When a company sees a lot of insider buying, this is viewed very highly among analysts, because insiders know more about their companies than anyone else.
Net insider buying can be even more telling in the days leading up to an earnings release. Are these company insiders feeling confident their earnings will beat, or at least meet, analyst expectations?
Business section: Investing ideas
To create this list, we began by searching for companies releasing earnings next week. We then ran a screen for names that have seen high net insider purchases over the last six months.
The final list is below. The insider buying data suggests employees are optimistic about these companies' performance -- do you think they're poised for success?
List sorted by net insider purchases as a percent of share float. (Click here to access free, interactive tools to analyze these ideas.)
1. Amphenol: Engages in the design, manufacture, and marketing of electrical, electronic, and fiber optic connectors; interconnect systems; and coaxial and specialty cables worldwide. Earnings results scheduled to be released on 01/18. Over the last six months, insiders were net buyers of 118,300 shares, which represents about 0.07% of the company's 164.69M share float.
2. BancFirst: Operates as the holding company for BancFirst that provides commercial banking services to retail customers and small to medium-sized businesses in the non-metropolitan trade centers of Oklahoma and the metropolitan markets of Oklahoma City, Tulsa, Lawton, Muskogee, Norman, and Shawnee. Earnings results scheduled to be released on 01/17. Over the last six months, insiders were net buyers of 33,044 shares, which represents about 0.55% of the company's 5.99M share float.
3. Community Trust Bancorp
4. Interactive Brokers Group
5. Kinder Morgan Management
6. MGIC Investment
7. Plexus
8. Renasant: Provides financial and insurance services to retail and commercial customers. Earnings results scheduled to be released on 01/16. Over the last six months, insiders were net buyers of 8,000 shares, which represents about 0.03% of the company's 23.98M share float.
9. Audiovox: Operates as a distributor and value added service provider in the accessory, mobile, and consumer electronics industries. Earnings results scheduled to be released on 01/09. Over the last six months, insiders were net buyers of 32,000 shares, which represents about 0.17% of the company's 18.65M share float.
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.
