In a victory for common sense, the trading behavior of company executives, directors, and large shareholders in the stocks of firms they're registered "insiders" at have been proven profitable to monitor by both academic studies and (more importantly) the experience of your fellow professional investors.
Below are lists of the top 10 mainly open-market insider purchases and sales filed at the Securities and Exchange Commission Monday, October 15, 2012 as ranked by dollar value.
Please note, however, that these are factual lists, not buy and sell recommendations. Dollar value is only one metric to assess the importance of an insider transaction, and, frankly, often not even the most important metric that determines if an insider transaction is significant.
(NASDAQ:FANG) bought $30 million worth of shares in its own initial public offering through an open market disposition. The oil and natural gas company made an IPO on October 12. DB Energy is affiliated with Wexford Capital, the equity sponsor to the company, and it bought the IPO shares at the same price as the public. Wexford still owns close to 40% of Diamondback Energy. FPR Partners continued buying ViaSat
(NASDAQ:VSAT), this time picking up about $2.4 million worth of the satellite networking company. Last week, it picked up over $7 million of the stock and yesterday reported a further $3 million purchase.
FactSet Research Systems
(NYSE:FDS) CEO Philip Hadley sold $9.6 million worth of the financial analytics firm on the open market. Cracker Barrel
(NASDAQ:CBRL) director Michael Woodhouse sold $3.2 million worth of stock in the restaurant chain through an automatic sale (10b5-1 program).
At InsiderInsights.com, we find new investment ideas just about every day using these and more intricate insider screens to determine where we should focus our subsequent fundamental and technical analysis. And while stocks don't (or shouldn't) move up or down based on insider activity alone, insiders tend to be good indicators of when real stock-moving events like earnings surprises, corporate actions, and new products may be in the offing.
| Key to Insider Title and Trans Type Codes
Source: InsiderInsights.com | Key to Insider Title and Trans Type Codes
Editor's note: Jonathan Moreland is the founder of Insider Insights and author of "Profit From Legal Insider Trading."
No positions in stocks mentioned.