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 many of them get paid largely in stock options or restricted shares. 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 might 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 13 health-care equipment and technology stocks made the list:
|
Security |
Net Number of Buys |
No. of Shares Bought |
Total Value |
Market Cap (in Millions) |
|---|---|---|---|---|
|
Quidel |
3 |
120,750 |
$1,690,000 |
$453 |
|
Boston Scientific |
1 |
102,283 |
$683,000 |
$9,919 |
|
STAAR Surgical |
1 |
50,802 |
$281,000 |
$239 |
|
Sirona Dental Systems |
1 |
5,000 |
$210,000 |
$2,544 |
|
SonoSite |
2 |
5,000 |
$152,000 |
$392 |
|
Hill-Rom Holdings |
2 |
4,000 |
$125,000 |
$1,898 |
|
AngioDynamics |
2 |
34,220 |
$84,000 |
$351 |
|
Alere |
3 |
26,271 |
$81,000 |
$2,118 |
|
Endologix |
1 |
10,000 |
$80,000 |
$527 |
|
Symmetry Medical |
1 |
3,000 |
$26,000 |
$288 |
|
Alphatec Holdings |
2 |
41,465 |
$15,000 |
$228 |
|
Computer Programs & Systems |
1 |
150 |
$9,000 |
$745 |
|
Antares Pharma |
1 |
2,000 |
$4,000 |
$234 |
Source: Capital IQ, a division of Standard & Poor's, as of August 17, 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 Quidel, which offers diagnostic test solutions, made three open-market purchases worth a total of $1,690,000. In contrast, one Antares Pharma insider spent $4,000 on open-market buys. Both are bullish signs, but the Quidel purchases look much more promising. Foolish colleague Seth Jason recently described Quidel's earnings as "outstanding", while another Fool, Brian Orelli, calls Boston Scientific a "show-me" company and questions whether recent good news is sustainable. Perhaps the insider that recently made a significant $683,000 open-market purchase, putting that company at No. 2 on our list, thinks it is.
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:
- Add STAAR Surgical to My Watchlist.
- Add SonoSite to My Watchlist.
- Add Sirona Dental Systems to My Watchlist.
- Add Quidel to My Watchlist.
- Add Hill-Rom Holdings to My Watchlist.
- Add Boston Scientific to My Watchlist.
- Add AngioDynamics to My Watchlist.
