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Top Insider Trades: Big Buys Into VMware and Tenet Healthcare


Phil Faclone's Harbinger Capital crosses Crosstex Energy off its list.

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 Tuesday, October 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.

VMware (NYSE:VMW) majority owner EMC (NYSE:EMC) made a $19.9 million stock purchase in the virtualization software maker as a supportive move likely tied to inside knowledge that VMW's third-quarter earnings were going to be reported some 12% lower yesterday. VMware reported a profit of $156.8 million down from $177.5 million a year earlier. The $0.36/share reported was well off analysts' estimates of $0.63/share. The stock purchase also represented faith in EMC's new president, Pat Gelsinger, the former president and COO of EMC. In a related move, VMware's former CEO moved to EMC as its chief strategist. Minyanville reported earlier about Cisco's VCE partnership with EMC and VMware.

Another beneficial owner increasing its stake is Glenview Capital, which made a $4.7 million investment in Tenet Healthcare (THC) stock, according to SEC filings. Earlier this month, Tenet's subsidiary Conifer Health Solutions signed an agreement to acquire InforMed Health Care Solutions, a deal which is expected to add $50 million in incremental annual revenues to Conifer. Glenview has been steadily increasing its holdings in THC. It purchased $17.25 million worth of shares which it disclosed on September 18 and $10 million worth of shares disclosed on October 17. Tenet is expected to report its third quarter results on November 7.

Billionaire Phil Falcone's Harbinger Capital she $91 million worth of midstream master limited partnership Crosstex Energy (NASDAQ:XTXI) which operates pipelines and processing plants in the natural gas space. Harbinger took an initial 8.1% stake in Crosstex in August 2010 which was increased to over 2011. During 2011, Falcone was widely reported to be predicting that XTXI stock could rise to $18/share. On Monday the company paid out a dividend worth $0.33 per unit. At press time, its shares were trading at $13.34.

At, 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: | Key to Insider Title and Trans Type Codes

Source: | 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."
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