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Insiders buy their companies for one reason: they are signaling that they have confidence in the company's future performance. Insiders, especially executives and directors of companies tend to know their company very well. Tracking their stock purchase activities is a very good point to start for lucrative returns.

Large dollar amount purchases are especially diagnostic, as the higher amount of purchase shows how confident some of the insiders are about the future stock market returns of their companies.

This article analyzes insider purchase activities when they buy at least $1,000,000 worth of shares during the past week, filed at the Securities and Exchange Commission. I have written a short analysis of each company. However, these are not buying and selling recommendations. Of course, insiders could be wrong. It is nevertheless a good starting point to add those stocks to watch list.

IMAX Corporation (IMAX) is an entertainment company. It has a market cap of $1.5 billion. Its stock closed at $22.80 per share on Friday. Over the past week, IMAX has one insider who purchased a total of 326,400 shares at the total value of $7,499,534. Its P/E ratio of 80.00 is on the expensive side. Investors should use some cautious because of this valuation. This company's value seems reasonable with a sub-one PEG ratio, suggesting its growth is outpacing its valuation. Its price/book ratio is 7.33. IMAX has an enterprise value / EBITDA ratio of 34.92. The valuation is a little too expensive for my taste. Its profit margin was 7.86% over the past year. The company had a net income of $19.13 million and EBITDA of $43.42 million on revenue of $243.39 million. The company has $21.59 million cash on its balance sheet. Its debt burden is $55.00 million. Its operating cash flow was $26.24 million, and its free cash flow was $-48.87 million. The recent trading volume is below average. This month, 10.94 million shares are being shorted. Comparing to 10.25 million shares shorted over the previous month, the shared short has increased by 6%. The short ratio of IMAX is 8.30, accounting for 19.30% of floating shares. Such a high short ratio means two things: 1. the market is bearish about the stock in general, and 2. short squeeze could easily happen with suitable news.

Navistar International Corporation (NAV) is a trucks & other vehicles company. It has a market cap of $1.61 billion. Its stock closed at $23.44 per share on Friday. Over the past week, Navistar International has 2 insiders who purchased a total of 1,785,074 shares at the total value of $41,495,234. Multiple insider purchase occasions are usually a positive sign. The shares sold account for 2.58% of the company's market cap. At a P/E ratio of 1.27, the stock appears fairly cheap in valuation. The PEG ratio is way above one, something to be cautious about. Navistar International has an enterprise value / EBITDA ratio of 15.06. The valuation is a little too expensive for my taste. It has a profit margin of 9.36%. I don't like Navistar International's operating margin of 0.54%, a sign for the company's shaky financial health. The company had a net income of $1.33 billion and EBITDA of $360.00 million on revenue of $14.21 billion. The company has $681.00 million cash on its balance sheet. Its debt burden is $4500.00 million, or approximately in debt/equity ratio. Its operating cash flow was $703.00 million, and its free cash flow was $-1300.00 million. The trading volume is relatively normal. This month, 5.21 million shares are being shorted. Comparing to 7.59 million shares shorted over the previous month, the shared short has decreased by 31%. The short ratio of Navistar International is 1.10, accounting for 9.60% of floating shares.

VMware, Inc. (VMW) is a technical & system software company. It has a market cap of $36.48 billion. Its stock closed at $85.38 per share on Friday. Over the past week, VMware Inc. has one insider who purchased a total of 241,818 shares at the total value of $19,994,019. Its P/E ratio of 46.68 is on the expensive side. Investors should use some cautious because of this valuation. Its price/book ratio is 6.87. VMware Inc. has an enterprise value / EBITDA ratio of 29.73. The valuation is a little too expensive for my taste. Its profit margin was 19.85% over the past year. VMware, Inc. has a very healthy operating margin of 20.08%. The company had a net income of $789.56 million and EBITDA of $1.04 billion on revenue of $3.98 billion. Both its revenue and earnings grew in double digits over the latest quarter, by 25.10% and 52.20%, respectively. The company has $5220.00 million cash on its balance sheet. Its debt burden is $450.00 million, or approximately 8.66 in debt/equity ratio. Its operating cash flow was $2.12 billion, and its free cash flow was $1.26 billion. Average trading volume is observed lately. This month, 3.67 million shares are being shorted.

Westport Innovations Inc. (WPRT) is an auto parts company. It has a market cap of $1.87 billion. Its stock closed at $34.10 per share on Friday. Over the past week, Westport Innovations Inc. has one insider who purchased a total of 200,000 shares at the total value of $7,012,000. Its price/book ratio is 4.31. One concern is the company isn't profitable at this point. The company had a net income of $-68.32 million and EBITDA of $-13.87 million on revenue of $315.15 million. The company has $333.33 million cash on its balance sheet. Its debt burden is $88.33 million. Low recent trading volume can be negative or positive. It can be negative because it will be difficult for people to discover this company. It can be positive because ignored stocks tend to be undervalued. This month, 15.80 million shares are being shorted. Comparing to 17.16 million shares shorted over the previous month, the shared short has decreased by 7%. There isn't enough financial evidence to back up a bullish case for this company.

Source: Million Dollar Insider Buys This Past Week