Top Insider Trades: Genomic Health and Kansas City Southern See Insider Buys

By Jonathan Moreland  NOV 26, 2012 11:03 AM

Meanwhile TravelZoo and Krispy Kreme posted insider sales.

 


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 Friday, November 23, 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.

The most recent large insider purchases and sales were done on the open market, according to SEC documents. Recently, at least half, or the majority of transactions have been previously scheduled automatic deals. Doing deals on the open market suggests that either the insiders do know something important about the company or are making the moves for personal (likely tax) reasons.

Open market buyers included Felix Baker of Genomic Health (NASDAQ:GHDX) and Henry R. Davis of Kansas City Southern (NYSE:KSU). Baker, a director and/or founder of several biopharmaceutical and scientific start-ups, bought $6.2 million worth of GHDX where both he and his brother, Julian Baker, serve as managing partners. Both Baker brothers are also directors of Baker Brothers Investments, which manages a family of long-term investment funds for major university endowments and foundations, focused on publicly-traded life sciences companies.

Davis bought nearly $5 million worth of stock in the railroad company KSU, which counts fellow billionaires Ken Fisher (Fisher Asset Management) and Steve Cohen (SAC Capital Advisors) as other large beneficial owners.

Ralph Bartel's Azzurro Capital sold nearly $5.2 million worth of its Travelzoo (NASDAQ:TZOO) holdings. In October 2009, Azzurro Capital, controlled by Bartel, Travelzoo's founder and chairman, essentially took control of the company's Asia-Pacific business. Bartel's brother, Holger Bartel, is the chairman of Travelzoo's board and its former CEO.

Mohamed Abdulmohsin Al Kharafi and Sons sold nearly $3.5 million worth of Krispy Kreme Doughnuts (NYSE:KKD). The Kuwait-based private investment firm first invested in the doughnut chain in 2006. Over the past year, the investment firm has only sold stock of KKD. It has purchase no more additional shares.

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.


Source: InsiderInsights.com | 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.