Company insiders report when they buy shares of their employer, and when they do, analysts and investors view it as a very bullish indicator.
The reason why is insiders, which include members of the board and upper management, are expected to know more about their company than other investors, so when they express their optimism in the company's prospects, it's viewed positively.
To illustrate this idea, we ran a screen on stocks hitting new 52-week highs for those with the most significant net insider purchases over the last six months.
Business section: Investing ideas
Below are the results of this screen. These stocks have recently closed at new 52-week highs, and they also have seen net buying from insiders over the last six months indicating their optimism.
Are you also optimistic about these companies' prospects?
Use this list as a starting point for your own analysis. (Click here to access free, interactive tools to analyze these ideas.)
1. American Eagle Outfitters (NYS: AEO) : Operates as an apparel and accessories retailer in the United States and Canada. Over the last six months, insiders were net buyers of 1,134,490 shares, which represents about 0.68% of the company's 167.40M share float.
2. Calumet Specialty Products Partners (NAS: CLMT) : Produces and sells specialty hydrocarbon products in North America. Over the last six months, insiders were net buyers of 156,140 shares, which represents about 0.6% of the company's 25.90M share float.
3. Pharmacyclics (NAS: PCYC) : Operates as a clinical-stage biopharmaceutical company focusing on developing and commercializing small-molecule drugs for the treatment of immune mediated disease and cancer. Over the last six months, insiders were net buyers of 1,340,060 shares, which represents about 2.47% of the company's 54.25M share float.
4. Pebblebrook Hotel Trust (NYS: PEB) : Operates as a real estate investment trust. Over the last six months, insiders were net buyers of 36,945 shares, which represents about 0.07% of the company's 50.60M share float.
5. Constellation Brands (NYS: STZ) : Produces and markets alcoholic beverages primarily in the United States, Canada, and New Zealand. Over the last six months, insiders were net buyers of 34,839 shares, which represents about 0.02% of the company's 164.53M 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.
Kapitall's Alexander Crawford does not own any of the shares mentioned above. Insider data sourced from Yahoo! Finance.
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