Academic studies have shown that insider trading is most profitable when several insiders buy around the same time. A study by University of Illinois professor Josef Lakonishok and his student Inmoo Lee shows that insider purchases generate more than 7 % per year in excess returns above index funds when there are several insiders purchasing. Insider Monkey compiled the list of companies with at least 3 insiders buying with the latest purchase made in late November.
Here are the seven stocks insiders are buying like crazy:
1. Bank of America (NYSE:BAC): We reported significant insider trading in Bank of America three weeks ago. On Wednesday, a fourth director purchased 5,000 shares at $11.30. This is nearly 10% less than the price paid by previous insiders. We weren’t enthusiastic about the previous purchases but we believe this is a better point to monkey insider buys.
2. Versar Inc. (AMEX:VSR): This is a $30 Million company with several insider purchases over the past 3 months. The prices paid were as low as $2.60 per share at the end of September and as high as $3.25 on Wednesday. The daily transaction volume is less than 50,000 shares, so it doesn’t seem to be a good stock to monkey.
3. Rimage Corp (NASDAQ:RIMG): This is another stock we have covered three weeks ago, trading sideways since. It seems insiders are buying Rimage below $16 per share. The stock was trading above $18 at one point in October. A more recent insider purchase was at $15.35 on Tuesday.
4. Harris Interactive (NASDAQ:HPOL): This is another micro cap stock where insiders are buying like crazy compared to the average trading volume. Unfortunately, the stock trades at $0.88 and the average daily volume is 34,000 shares. The average insider paid around $0.86 per share during the past month. The latest transaction, nearly 15,000 shares, was on Wednesday.
5. Jamba Inc (NASDAQ:JMBA): Jamba Juice was very popular a couple of years ago with a market value within reach of $1 Billion. Today, the stock trades at $2.17 with a market cap of $130 Million. There were 3 different insiders purchasing over the past few months. The first purchase was on August 24th at $1.69. The latest transaction was on Tuesday at $2.04.
6. Citigroup Inc. (NYSE:C): This is the second large bank with significant insider purchases. On November 3 insiders spent nearly $2.5 Million and bought Citigroup shares at prices around $4.30. These transactions, with the Bank of America purchases, imply that banking stocks are undervalued in general.
7. Buckeye Technologies Inc (NYSE:BKI): An insider bought Buckeye shares at the end of August at $10.75. The stock closed at $20.26 yesterday. A second insider purchased on November 16th at $17.5 and the third insider purchased on November 22nd at $18.83. The stock increased by more than 7% in 10 days.
This is a guest post written by Insider Monkey.