Wish you could get an inside peak at your favorite companies? One idea is to look at insider stock purchases, which indicate how optimistic a company's employees really are about their company's prospects. After all, who knows more about a company than they do?
We ran a screen with this idea in mind. We began by screening the tech sector for stocks that have been outperforming over the last quarter, with over 20% return. We then screened for those with significant optimism from their insiders, with net insider purchases of at least 1% of share float.
Because most companies don't have many insiders, share purchases representing 1% of share float from insiders is a significant show of confidence.
Interactive Chart: Press Play to compare changes in market cap over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.
Do you think these insiders are correct in their optimism? Use this list as a starting point for your own analysis.
List sorted by net insider purchases over the last six months as a percent of share float.
1. China TransInfo Technology Corp. (CTFO): Provides public transportation information technology systems and related technology solutions in China. Market cap at $120.79M. Price at $4.71. Performance over the last quarter at 25.13%. Over the last six months, insiders were net buyers of 569,135 shares, which represents about 5.31% of the company's 10.72M share float.
2. VMware, Inc. (VMW): Provides virtualization and virtualization-based cloud infrastructure solutions primarily in the United States. Market cap at $46.36B. Price at $111.47. Performance over the last quarter at 24.06%. Over the last six months, insiders were net buyers of 3,295,564 shares, which represents about 4.13% of the company's 79.84M share float.
3. MEMSIC, Inc. (MEMS): Provides semiconductor sensor and system solutions based on integrated micro electro-mechanical systems technology and mixed signal circuit design. Market cap at $100.28M. Price at $4.10. Performance over the last quarter at 60.77%. Over the last six months, insiders were net buyers of 81,830 shares, which represents about 2.18% of the company's 3.76M share float.
4. Primus Telecommunications Group (PTGI): Provides integrated telecommunications services primarily in the United States, Australia, Canada, Brazil, the United Kingdom, and western Europe. Market cap at $225.39M. Price at $16.70. Performance over the last quarter at 34.02%. Over the last six months, insiders were net buyers of 129,832 shares, which represents about 1.41% of the company's 9.18M share float.
*Insider data sourced from Yahoo! Finance, all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.