5 Software and IT 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 the company's 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 software and IT services stocks made the list:
Net Number of Buys
No. of Shares Bought
Market Cap (in millions)
|Unisys (NYS: UIS)|
|Constant Contact (NAS: CTCT)|
|Lender Processing Services (NYS: LPS)|
|RealD (NYS: RLD)|
|Fiserv (NAS: FISV)|
Source: Capital IQ, a division of Standard & Poor's, as of Aug. 10, 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 Unisys made open-market purchases worth $297,000, while an insider buy at Fiserv was worth a less-head-turning $53,000.
Both are bullish signs, but the purchase of Unisys looks more promising. Last month the stock plunged after Unisys reported its third substantial estimate miss in four quarters. The company's earnings have been unpredictable; the insider buy may signal the next surprise will be a positive one.
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 Unisys to My Watchlist.
- Add Constant Contact to My Watchlist.
- Add Lender Processing to My Watchlist.
- Add RealD to My Watchlist.
- Add Fiserv to My Watchlist.
- Add VMware to My Watchlist.
At the time this article was published Fool contributorCindy Johnsondoes not own shares of any company named above. The Motley Fool owns shares of Fiserv. The Fool has opened a short position on Lender Processing Services. Motley Fool newsletter services have recommended buying shares of VMware. 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.
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