Top 5 Market Movers With Insider Buying As Of May 23, 2019

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Includes: AIG, CNDT, CTL, ECA, NYCB
by: Filing Scanner
Summary

A list of the top 5 stocks in terms of total volume traded that also had insider buying.

We provide in-depth analysis and ratings of each transaction.

Only insider transactions that were executed on the open market are included in this list. Any sale that was triggered by an option exercise has been excluded.

There are many ways to use insider transactions to help guide your investing strategies that don't rely on just the dollar amount of the transaction. While dollar amount should always be considered when ranking an insider purchase, here are a few other things to consider:

  1. How much has the insider's total stake increased in the company after the purchase?
  2. How has the stock performed historically after this insider made a purchase?
  3. Have other insiders at this company also made purchases recently?

In this article, we will analyze the top 10 stocks in terms of total volume traded that also had an insider make a purchase of the stock on the open market (transaction code P on SEC Form 4). We will be ranking each insider purchase based on the following criteria:

  1. Did the insider increase his/her total holding size by a significant amount (over 15%)?
  2. What was the three-month return of the insider's last purchase (over 10% gain in 90 days)?
  3. Have other insiders at this company made purchases in the last 30 days (two other insiders)?

The goal of this exercise is to help determine the insider's confidence level in their company and to determine if you should be buying alongside them.

No. 1: Encana Corporation (NYSE:ECA)

Trade Date Insider Name $ Value of Transaction Insider Title
5/23/19

Suttles Douglas James

$60,095 Pres, CEO
Change in Insider's Total Holding Insider's Previous Purchase 90-Day Return Number of Other Insiders at Company Making Purchases in Last 30 days
6% 35% 2

This is a name we will be watching closely with 2 of 3 of our criteria being met. We are cautious that while this insider's last open market purchase in December of 2018 led to a 35% return over the next 3 months. He made several other purchases leading up to that with less than stellar timing. This leads us to believe the there may be more downside before the price bounces.

No. 2: CenturyLink, Inc. (NYSE:CTL)

Trade Date Insider Name $ Value of Transaction Insider Title
5/23/19

Storey Jeffrey K

$491,480 Pres, CEO
Change in Insider's Total Holding Insider's Previous Purchase 90-Day Return Number of Other Insiders at Company Making Purchases in Last 30 days
2% -19% 3

We do like seeing the cluster buying that is has been happening over the month by insiders in this company. Historically all 4 insiders that have been buying this month have a poor record of price increases following their purchases so this would not trigger a buy for us.

No. 3: New York Community Bancorp, Inc. (NYSE:NYCB)

Trade Date Insider Name $ Value of Transaction Insider Title
5/09/19

Dahya Hanif

$43,148 Director
Change in Insider's Total Holding Insider's Previous Purchase 90-Day Return Number of Other Insiders at Company Making Purchases in Last 30 days
1% N/A 0

Without any additional purchases being made by other insiders, this purchase is a non-event and would not trigger a buy for us.

No. 4: American International Group, Inc. (NYSE:AIG)

Trade Date Insider Name $ Value of Transaction Insider Title
5/23/19

Vaughan Therese M

$51,710 Director
Change in Insider's Total Holding Insider's Previous Purchase 90-Day Return Number of Other Insiders at Company Making Purchases in Last 30 days
N/A N/A 0

Without any additional purchases being made by other insiders, this purchase is a non-event and would not trigger a buy for us.

No. 5: American International Group, Inc. (NYSE:CNDT)

Trade Date Insider Name $ Value of Transaction Insider Title
5/21/19 Carl CIcahn $1,900,431 10% Owner
Change in Insider's Total Holding Insider's Previous Purchase 90-Day Return Number of Other Insiders at Company Making Purchases in Last 30 days
0% N/A 0

We always like seeing insiders buying following a large drop in price, in this case, a 30% drop following earnings. We would like to see at least one or two other insiders buying in the next week for us to start buying as well.

As you can see, finding an insider transaction that meets even these basic criteria can be like finding a needle in a haystack. Along with the criteria we have used here, we also like to analyze the price action of the stock to help time the entry and take a deeper dive into the insider's previous returns following a purchase.

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in CNDT over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.