If you are looking for clues telling you which stocks have a good chance of increasing in value, you might want consider watching what insiders are doing. After all, talk is cheap, but when insiders put their own money on the line, you should sit up and take note.
Trius Therapeutics Inc (TSRX) topped the insider-buying charts for the week ending July 9th as insiders snapped up 3,001,859 shares of company stock at a market value of $15,009,295. During the past six months, insiders have increased their overall holdings in the company by 354.34% and now own 57.55% of TSRX stock.
Medicines Co (MDCO) was not far behind, with insiders buying 667,040 shares at a market value of $8,037,832. Insiders now own 1.43% of the company's stock after decreasing their overall holdings by -4.17% during the past six months.
Rounding out the top five companies with strong insider buying last week are:
- Guaranty Bancorp (GBNK) - 2,644,960 shares at a value of $3,438,448
- Mercer International Inc Wa (MERC) - 644,900 shares at a value of $3,262,145
- Saul Centers Inc (BFS) - 62,300 shares at a value of $2,650,834
I like to look at insider buying more than insider selling because there is only one reason insiders buy shares of a company -- they believe the stock price is going to move higher and they want to profit from it. On the other hand, there are many reasons insiders sell stock -- planned sales, tax-planning purposes and so on -- which makes this data much less reliable as a sentiment indicator.
For a big-picture view, insiders in the health care and finance sectors look like they have quite a bullish outlook for the future. Last week, insiders bought $10,854,733 worth of shares in the Health Care sector and $9,958,380 in the Finance sector. Here's how the other sectors stacked up last week:
- Technology - $7,196,943
- Basic Industries - $4,904,414
- Business Services - $1,713,648
- Consumer Services - $1,225,555
- Energy - $1,131,092
- Consumer Non Durables - $941,707
- Media - $500,029
- Industrial - $343,278
Disclosure: Hansen does not own shares of the stocks discussed above. Positions can change without notice.