Top Million Dollar Insider Buys This Year: A Semi-Annual Review

|
Includes: BLK, DVMT, ECL, HPQ, KO, VMW, VRX
by: Gutone

There are generally three types of insiders: executives, directors, and 10% beneficial owners. They all have a lot of information about the company, much more than the general market anyway. While there are laws preventing them from trading using insider information, they can still make long term oriented purchases.

Large amount of purchase shows special confidence in the business, and hence likely to signal above market average returns.

This article analyzes insider purchase activities over the past six months. The insiders of these large companies bought at least $10,000,000 worth of shares, filed at the Securities and Exchange Commission. I have written a short analysis of each company. However, these are not buying and selling recommendations.

BLK ChartClick to enlarge

BLK data by YCharts

BlackRock, Inc. (NYSE:BLK) is an asset management company. It has a market cap of $30.86 billion. Its stock price is around $165 per share lately. Over the past six months, BlackRock has 3 insiders who purchased a total of 70,580 shares at the total value of $11,880,283. Multiple insider purchase occasions are usually a positive sign. BlackRock, Inc. has a very healthy operating margin of 37.15%. The trading volume has been low recently. The company has a decent dividend payout that provides a minimum margin of safety. I would pay particular attention to a case like BlackRock where the company's stock has been beaten down quite a lot over the past a few months. The company appears attractive.

ECL ChartClick to enlarge

ECL data by YCharts

Ecolab Inc. (NYSE:ECL) is a consumer goods company specializing in cleaning products. It has a market cap of $19.44 billion. Its stock price is around $66 per share. Over the past six months, Ecolab has one insider who purchased a total of 919,046 shares at the total value of $56,808,306. The insider turns out to be one of the richest persons in the world, Bill Gates, who is a 10% beneficial owner of the company. Given that its price is only 1.73% lower than its 52-week high, the overall market sentiment appears positive. The recent trading volume is below average. The company has a decent dividend payout that provides a minimum margin of safety.

HPQ ChartClick to enlarge

HPQ data by YCharts

Hewlett-Packard Company (NYSE:HPQ) is a diversified technology company, offering personal computers, servers, printers and IT consulting services. It has a market cap of $40.17 billion. Its stock is traded at slightly above $19 lately. Over the past six months, Hewlett-Packard has 2 insiders who purchased a total of 18,426,300 shares at the total value of $412,570,469. Multiple insider purchase occasions are usually a positive sign. The shares purchased account for 1.03% of the company's market cap. Its price shows near term weakness, close to 52-week low. While the stock appears it might have bottomed, investors should proceed with caution. I have written extensively about HP. In this article, I argue that HP's turnaround can be one of the most lucrative for investors. HP still pays dividend. At this price, it looks very appealing.

KO ChartClick to enlarge

KO data by YCharts

The Coca-Cola Company (NYSE:KO) is the world's largest soft drinks company. It has a market cap of $169.21 billion. Its stock is traded at around $76. Over the past six months, Coca-Cola has 4 insiders who purchased a total of 278,133 shares at the total value of $21,347,422. Multiple insider purchase occasions are usually a positive signal. I like The Coca-Cola Company's operating margin of 23.43%, a good sign for the company's financial health. Low recent trading volume is observed. Coca-Cola is a good yielder. It is a great candidate for any long term oriented portfolio.

VMW ChartClick to enlarge

VMW data by YCharts

VMware, Inc. (NYSE:VMW) is a technical & system software company. It has a market cap of $39.5 billion. Its stock closed at $86 per share lately. Over the past six month, EMC (EMC) has purchased a total of 859,800 shares at the total value of $74,938,373. VMware has a very high operating margin of 20.08%. It is, however richly valued. The recent trading volume is below average. Personally, I see more negatives than positives in this company.

VRX ChartClick to enlarge

VRX data by YCharts

Valeant Pharmaceuticals International, Inc. (NYSE:VRX) is a drug company. It has a market cap of $14.26 billion. Its stock is traded at around $44 lately. Over the past six months, Valeant Pharmaceuticals International has 4 insiders who purchased a total of 1,771,225 shares at the total value of $84,674,076. Multiple insider purchase occasions are usually a positive signal. Like many pharmaceutical companies, Valeant Pharmaceuticals has a healthy operating margin of 23.99%. Thinning trading volume suggests that trading interest in the company is waning. It stock has been beaten down badly since its guidance disappointed in May. A lot of caution should be used while watching new progress.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.