Here are 3 top stocks that insiders keep pouring millions into — following these ‘in-the-know’ bigwigs could be a sharp way to beat this nightmarish market
Bear markets are noisy and volatile. It’s difficult for investors to cut through the noise, find the right signals and discover good opportunities.
One of the clearest signals is insider trading activity. When the senior directors, founders, and large shareholders of a corporation buy or sell shares, it could be a signal of underlying strength or weakness.
Some studies have found that net insider activity in any month is positively correlated with stock price action over the subsequent two months.
Put simply, insiders buying more shares of their own company is a green flag. Here’s a look at the companies with the heaviest insider buying activity in recent months.
Energy stocks have outperformed nearly every other asset on the market this year. However, the sector has lost momentum in recent weeks. Crude oil lost over 20% of its value, dipping energy stocks into an official bear market.
Insiders at Occidental Petroleum (OXY) see this dip as an opportunity. Of the 22 total insider trades over the past three months, 16 were insider purchases. On net, insiders purchased more than 17 million shares of the company during this quarter.
Senior directors Christopher Champion and Vicky Bailey were net buyers during this quarter. But the biggest transactions came from key shareholder Berkshire Hathaway (BRK). Warren Buffett has been aggressively accumulating this position since the start of the year.
The fact that insiders and the world’s most successful investor are buying this stock at the same time is a clear indication of underlying value.
Insiders have been aggressively buying shares of financial technology company Fiserv (FISV). The stock has been beaten down along with the rest of the FinTech sector. However, it has outperformed its peers. It’s down just 17% year to date, compared to the Nasdaq’s 30% plunge over the same period.
Now, insiders see more…