One way to look for potential stocks to buy is to see who else is buying. And not just looking at any buyers of the stock, but the insiders. An insider is generally a top executive, a director, or an owner of 10% or more of the shares. If an insider sells a stock, it could be for one of many reasons: raising money to buy a house, estate planning purposes, paying for their kids college education, diversification, are just a few of the possibilities.
Yet if an insider buys stock, it is only for one reason. It means that he or she believes the stock will go up in value. And an insider probably has a better idea about the stocks potential than the average investor.
So who's been buying what? Alico Inc. (ALCO), a company in the agribusiness and land management business, has had eight buy transactions during the last couple weeks. Two directors have purchased over $4 million of the stock. Alice trades at 26 times trailing earnings and pays a small dividend of 0.5%. Revenues for the latest reported quarter were up 7.8%.
Interestingly, three insiders bought shares of Vanguard Natural Resources (VNR), which owns oil and natural gas properties. The stock has a price to earnings ratio of 26, and pays a beefy yield of 10.1%. The three insiders, including the CEO and two executive VPs, bought over $960,000 of the stock as reported this week.
One of the directors of Vince Holding (VNCE), a contemporary fashion brands company, bought over $3 million of the company's stock, with three different purchases recently. The stock trades at 18 times trailing earnings and 14 times forward earnings.
Maybe you can be an insider by following the real insiders. If you like interesting stock lists like this, check out the many free stock lists at WallStreetNewsNetwork.com.
Disclosure: Author didn't own any of the above at the time the article was written.