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There are many different strategies to trade stocks, and one of them is to find insider trading of stocks. When corporate insiders trade in their own securities, they must report their trades to the Securities and Exchange Commission (SEC) usually within a few business days of the trade. Insider trading cannot be based on material non-public information. However, many investors believe that corporate insiders may have better insight into the growth of the company and its proceedings.

In this article, I will focus on notable insider buy transactions for mid-cap companies (market cap between $2 billion and $10 billion) filed at the Securities and Exchange Commission on July 31, 2012. I have also included the key financial metrics for each of the companies. You can use this list as a potential starting point for your analysis.

Definition of an Insider: Corporate insiders are either a company's officers, directors, or any beneficial owners of more than 10% of a class of the company's equity securities registered under Section 12 of the Securities Exchange Act of 1934.

Rule 10b5-1 Definition: A rule established by the SEC that allows insiders of publicly traded corporations to create a trading plan of when and how to buy or sell shares in that company. Rule 10b5-1 allows major holders to buy or sell a predetermined number of shares at a predetermined time. 10b5-1 plans are used by many corporate insiders to avoid the accusations of insider trading, regardless of what nonpublic knowledge he/she may later come to possess.

1. MSC Industrial Direct (MSM): MSC Industrial operates as a direct marketer and distributor of metalworking and maintenance, repair, and operations (MRO) products to industrial customers in the United States. MSC Industrial has a market cap of $4.31 billion and is currently trading around $68.73 with a 52-week range of $49.72 to $84.76. The stock has fallen 3.94% year to date.

According to an SEC filing on July 31, 2012, MSC Industrial had two insiders combine sold a total of 35,000 shares at a total value of $2,446,839. Multiple insider selling are usually a negative sign. Over the past three months, there have been a total of 17 insider transactions with 14 Sell transactions. Key financial metrics for MSC Industrial are given below:

The following chart provides the insider trading summary for three-month and 12-month periods.

2. Wyndham Worldwide (WYN): Wyndham provides various hospitality products and services to individual consumers and business customers in the United States and internationally. Wyndham has a market cap of $7.59 billion and is currently trading around $52.05 with a 52-week range of $24.76 to $53.56. The stock has gained 37.59% year to date.

According to an SEC filing on July 31, 2012, Wyndham had two insiders combine sold a total of 10,426 shares at a total value of $540,421. The current price is fairly close to its 52-week high. Over the past three months, there have been a total of 11 insider transactions, with five Sell transactions. Key financial metrics for Wyndham are given below:

The following chart provides the insider trading summary for three-month and 12-month periods.

3. Kansas City Southern (KSU): Kansas City Southern, through its subsidiaries, engages in the freight rail transportation business. Kansas City Southern has a market cap of $8.01 billion and is currently trading around $72.80 with a 52-week range of $45.63 to $79.50. The stock has gained 7.04% year to date.

According to an SEC filing on July 31, 2012, Jose Guillermo Zozaya Delano (president and executive representative of sub.) sold a total of 6,849 shares at a total value of $500,058. Over the past three months, there have been a total of 12 insider transactions, with three Sell transactions. Key financial metrics for Kansas City Southern are given below:

The following chart provides the insider trading summary for three-month and 12-month periods.

4. Kennametal (KMT): Kennametal manufactures and supplies tooling, engineered components, and advanced materials consumed in production processes worldwide. Kennametal has a market cap of $2.95 billion and is currently trading around $36.90 with a 52-week range of $29.30 to $47.82. The stock has gained 1.04% year to date.

According to an SEC filing on July 31, 2012, Phil H. Weihl (vice president) sold a total of 5,000 shares at a total value of $188,700. Over the past three months, there have been a total of five insider transactions with two Sell transactions. Key financial metrics for Kennametal are given below:

The following chart provides the insider trading summary for three-month and 12-month periods.

Source: Some data is taken from Google Finance, Nasdaq, Finviz, Fidelity, and SEC.gov.

Disclaimer: I am not a registered investment advisor and do not provide specific investment advice. The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. It is up to investors to make the correct decision after necessary research. The information and data is believed to be accurate, but no guarantees or representations are made.

Source: Notable Mid-Cap Insider Sells Filed On July 31