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by Matt Doiron

In our analysis, stocks bought by insiders tend to slightly outperform the market on average (read our review of studies on insider trading). We think this is because company insiders should be more confident than usual if they are purchasing stock rather than diversifying their wealth as economic theory would normally predict. Investors cannot imitate every insider purchase, but we think it can be wise to treat insider buying similarly to a stock screen and perform further research on any interesting names which are getting attention. Read on for our quick take on five stocks that insiders have bought recently.

A trust related to an AT&T (T) insider bought 9,000 shares of the megacap telecommunications company. AT&T, as with many telecoms, is a popular stock among income and defensive investors due to its low beta (of 0.3) and its dividend yield of 5.1%. Earnings have been down a bit recently as the wireline business struggles, but the company has been aggressively buying back shares and the stock is valued at only 14 times expected earnings for this year. As a result it seems worthy of a closer look.

We maintain a database of quarterly 13F filings from hedge funds and other notable investors as part of our work developing investment strategies (for example, we have found that the most popular small cap stocks among hedge funds earn an average excess return of 18 percentage points per year). We can see that billionaire Ken Fisher's Fisher Asset Management owned just over 7 million shares of AT&T at the end of the first quarter of the year (see Fisher's stock picks).

After Panera (PNRA) reported disappointing results for Q2, the stock price fell about 10%. The company's CFO has reacted by buying 1,500 shares of the quick service restaurant. Panera had recorded double-digit growth rates on both top and bottom lines, but markets had already been expecting strong growth and so this was something of a miss compared to expected earnings. The stock now trades at a trailing P/E of 26, and therefore will have to continue to generate high earnings growth. However, this trailing earnings multiple does represent a discount to some larger QSR peers such as Starbucks (SBUX) and Chipotle (CMG).

Logitech (LOGI) is another stock where we've identified at least one insider buying recently. The $1.1 billion market cap computer peripherals (for example, it produces computer mice and speakers) and videoconferencing company is unprofitable on a trailing basis. It did report a surprise small adjusted profit in its most recent quarter, and Wall Street analysts expect the company to improve enough next year that the forward P/E is 16. Markets are skeptical: Logitech is down year to date against a rising market, and according to the most recent data 15% of the float is held short.

A Board member at McGraw-Hill Financial (MHFI) bought 2,500 shares of stock on July 30th. Following the sale of the company's education unit, McGraw-Hill focuses on providing financial information including under the Standard & Poor's and Capital IQ brands. The stock trades at 17 times forward earnings estimates, as many investors expect that the company will be able to improve the efficiency of its operations with management being more focused on these businesses. Growth in S&Ps ratings and indices businesses helped fuel 18% earnings growth in Q2 2013 versus a year earlier, and we'd be interested in taking a closer look at the company.

An insider at American Campus Communities (ACC), a $4 billion market cap real estate investment trust focused on student housing facilities, bought 2,000 shares at an average price of $39.59 per share. American Campus Communities recently increased its quarterly dividend to 36 cents per share, which comes out to an annual yield of 3.6%. Real estate investment trusts receive favorable tax treatment conditional on distributing a large share of taxable income to shareholders, which often results in high yields. Recent reports show increasing funds from operations, and student housing would seem to be a good business. As a result, income investors not already overexposed to REITs may want to consider it.

Source: Recent Picks From Company Insiders: A Telecom, A Restaurant, And More