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 showed that insider purchases generate more than 7 % per year in excess returns above index funds when there are several insiders purchasing. One company with insider purchases, Hercules Technology Growth Capital Inc. (HTGC), closed at $10.36 the Friday before we reported the insider purchase. During the past week the stock increased by 4.3%, beating the S&P 500 index, which increased by 1.1%. This is the fifth week in a row our list of insider purchases has beaten the S&P 500 index. Seventeen of the 22 stocks that made our list managed to beat the S&P 500 index.
Here are the most recent stocks insiders are buying like crazy, with at least three insiders buying:
1. Winmark Corp (WINA): Winmark Corp insiders have been buying since December 22. The stock closed at $33.16 last Friday.
2. Trailer Bridge Inc (TRBR): Trailer Bridge insiders have been both buying and selling around $3. Douglas E. Schimmel purchased 30,000 shares at $2.91 on Thursday. The stock closed at $2.94 on Friday.
3. Cogent Communications Group Inc (CCOI): There have been recent insider purchases at Cogent Communications around $14 per share. On Friday the stock closed at $13.74 -- less than what the insiders paid for it.
4. Diamond Foods Inc (DMND): This stock had significant insider purchases three months ago when it was trading around $41. More recently Diamond Foods’ Chairman and CEO Michael J. Mendes purchased additional shares below $52. On Friday, the stock closed at $52.30.
5. EQT Corp (EQT): There are recent insider purchases in EQT Corp. The largest transaction was two months ago at $38.38; recent transactions occurred below $45. On Friday, the stock closed at $45.62.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.