Here are 3 top stocks insiders keep pouring millions into – following these “in the know” bigwigs could be an effective way to beat this nightmarish market
Bear markets are loud and volatile. It is difficult for investors to stand out, find the right signals and discover good opportunities.
Insider trading activity is one of the clearest signals. When a company’s top directors, founders, and major shareholders buy or sell stock, it can be a sign of underlying strength or weakness.
Some studies have shown that net insider activity in one month is positively correlated with the movement of stock prices over the following two months.
Simply put, insiders buying more shares of their own company are a green flag. Here’s a look at the companies with the most insider buying activity over the past few months.
Energy stocks have outperformed nearly every other asset in the market this year. However, the sector has lost momentum in recent weeks. Crude oil lost more than 20% of its value, plunging energy stocks into an official bear market.
Occidental Petroleum (OXY) insiders see this decline as an opportunity. Of the 22 insider trades in the past three months, 16 were insider buying. On the net, insiders bought more than 17 million shares of the company during this quarter.
Principals Christopher Champion and Vicky Bailey were net buyers during this quarter. But the biggest deals came from key shareholder Berkshire Hathaway (BRK). Warren Buffett has aggressively accumulated this position since the start of the year.
The fact that insiders and the world’s most successful investor are buying these stocks at the same time is a clear indication of the underlying value.
Insiders aggressively bought shares of fintech company Fiserv (FISV). The stock was beaten along with the rest of the FinTech sector. However, he outperformed his peers. It’s only down 17% since the start of the year, compared to the Nasdaq’s 30% drop over the same period.
Now, insiders see more room for growth to come. In the past three months, insiders completed 14 buy trades for a net amount of 1.63 million shares. Senior managers Guy Chiarello and Doyle Simons were net buyers, but the largest deals were executed by investment firm Valueact Holdings, LP
The Gitlab software platform (GTLB) has lost 60% of its value since last November. He was caught in the ongoing tech bear market. However, the company’s software package could see high demand as companies try to automate processes and improve efficiency during a downturn.
That’s why the management team expects revenue growth of 58% this year. Meanwhile, gross margins reach 90%. Simply put, the company is in a strong position to maintain its growth strategy despite the economic headwinds ahead.
GitLab’s management team is certainly confident about its prospects. They massively bought shares of the company. Insiders bought 18 million shares in 15 trades over the past three months. C-suite executives like Michael Mcbride, Robin Schulman and Dale Brown bought in this quarter.
Seed investor Khosla Ventures Seed C, LP has also increased its stake in the company. The venture capital team now owns more than 10% of GitLab’s outstanding shares.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.