Insiders Are Bullish About These Stocks Right Now

by: Insider Monkey

Academic studies have shown that corporate insiders have an edge over ordinary investors when it comes to purchasing stocks. On the other hand, insider sales hadn’t outperformed the market as insider sales are generally motivated by diversification or liquidity needs. Even small insider purchases are marginally profitable. The reason is simple-- insiders usually have a lot of exposure to their company’s performance. It doesn’t make sense for them to increase their exposure unless they believe their purchases have a high probability of being profitable. Sometimes they are early in their bets, but on the average, insider purchases beat the market over the following 12 month period.

Below we compiled a list of large cap stocks that insiders are bullish about right now. All companies have over $5 billion market cap and were purchased by at least one insider over the past week.





Apache Corp.



VMware, Inc.



Diamond Offshore Drilling Inc.



Valhi, Inc.


Apache Corp (NYSE:APA) is an energy company. During the past week, one insider bought APA. On December 20, William Montgomery purchased 2000 shares at $88.715. Two days later, the stock was priced at $90.75. Montgomery also bought 2000 shares of the stock at $90 on October 19 and another 4000 shares at $85.3825 on September 28. The stock once traded above $100 per share in mid November. Jean-Marie Eveillard’s First Eagle Investment Management invested $147 million in APA at the end of September. Ric Dillon’s Diamond Hill Capital also had $136 million worth of APA as of September 30.

VMware, Inc (NYSE:VMW) provides virtualization solutions from the desktop to the data center. VMW was bought by one insider in the past week. As a large shareholder of VMware, EMC Corp bought 14200 shares at $85.7344 on December 16. Now the stock is trading at $83.64 per share. EMC has been continuously purchasing the stock since August last year. At that time, the stock was trading at around $80 per share. Jim Simons is bullish about VMW. His Renaissance Technologies disclosed owning $67 million of the stock as of September 30.

Diamond Offshore Drilling Inc (NYSE:DO) is an offshore oil and gas drilling contractor. One insider bought the stock during the past month. On December 15, Paul Gaffney purchased 400 shares at $54.64 and another 600 shares at $54.65. Currently DO is trading at $56.8 per share, $2 higher than the price Gaffney paid. Jim Simons’ Renaissance Technologies had $23 million invested in DO at the end of the third quarter.

Valhi, Inc (NYSE:VHI) operates in three business segments: chemicals, component products and waste management. Harold Simmons purchased 56 shares at $52.75 and another 3214 shares at $53 on December 15. VHI is currently trading at $58.13 per share. Simmons has been continuously purchasing the stock since late August last year, when VHI was priced at only $16.5 per share. Jim Simons is bullish about VHI as well. At the end of September, Renaissance Technologies reported to own $1.8 million worth of VHI stocks.

Other stocks that insiders are buying over the past week include IDEXX Laboratories, Inc (NASDAQ:IDXX), Arch Coal Inc (ACI), Och-Ziff Capital Management Group LLC (NYSE:OZM), The Babcock & Wilcox Company (BWC), United Therapeutics Corporation (NASDAQ:UTHR), DNP Select Income Fund Inc (NYSE:DNP), MFA Financial, Inc (NYSE:MFA), Molycorp, Inc (MCP), Rosetta Resources, Inc (NASDAQ:ROSE), E*TRADE Financial Corporation (NASDAQ:ETFC), Kronos Worldwide Inc (NYSE:KRO), and EXCO Resources Inc (NYSE:XCO). Our past studies have shown that investors can outperform the market in the long term simply by imitating the corporate insiders. We urge investors to focus on the stocks insiders are buying and consider adding these stocks into their own portfolios.

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