Wish you could get an inside peek at your favorite companies? One idea is to consider insider buying trends. With this idea in mind, we ran a screen.
We began by screening the healthcare sector for stocks with high growth projections, with 5-year projected EPS growth rates above 15%.
We then screened these names for those with the confidence of their company insiders, such as members of the board and upper management, with significant net insider purchases over the last six months representing at least 2% of share float. Since most companies only have a handful of company insiders, net insider purchases representing 2% of share float is a big show of confidence in their employer's prospects.
For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research. (click to enlarge)
Tool provided by Kapitall.
Only two names made the list. Do you think these stocks will meet their high growth expectations? Use this list as a starting point for your own analysis. List Average 1-Year Return: 35%.
1. Forest Laboratories Inc. (FRX): Develops, manufactures, and sells branded and generic forms of ethical drug products. Market cap at $9.08B, most recent closing price at $34.17. EPS growth next 5 years at 15.85%. Over the last six months, insiders were net buyers of 4,078,369 shares, which represents about 1.55% of the company's 263.02M share float.
Of note: Genomic Health also has a significant level of institutional selling: Net institutional sales in the current quarter at -15.4M shares, which represents about 5.86% of the company's float of 263.02M shares.
2. Genomic Health Inc. (GHDX): Focuses on the development and global commercialization of genomic-based clinical laboratory services that analyze the underlying biology of cancer allowing physicians and patients to make individualized treatment decisions. Market cap at $959.47M, most recent closing price at $31.52. EPS growth next 5 years at 34.65%. Over the last six months, insiders were net buyers of 609,079 shares, which represents about 3.63% of the company's 16.80M share float.
Of note: Genomic Health also has a significant level of institutional buying: Net institutional purchases in the current quarter at 1.1M shares, which represents about 6.55% of the company's float of 16.80M shares.
*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.
