Insiders Respecting TriMas

Not all stocks whose insider buying I look at have a long trading history. Today's company, TriMas (TRS - commentary - Cramer's Take), is a case in point. But the fact that the company's IPO was relatively recent doesn't necessarily diminish the importance of the insiders, and definitely doesn't in this case, as I really like this stock.

But before we dig deeper into that, let's take a look at the market as a whole and see what type of environment this company is in.

Already leaning bullish in early September, my insider-based market indicators swung to an outright buy signal aprés Fed.

I would love to think that my latest buy signal will last as long as the one issued in July of last year, which harkened a solid six-month ascent for the market. Given the still uncertain state of the U.S. economy -- which has worrisome signs of both recession and inflation -- I have my doubts.

Then again, this is just the sort of wall of worry markets tend to surprise investors by climbing. And while I am intellectually inclined to agree with all of Doug Kass' well-presented scenarios about the damage to equities that economic imbalances may yet inflict, I think there is at least as good a chance that stocks could eek out reasonable gains in coming months as the world's economy muddles through its current turmoil.

Which is why it's usually best for investors to leave the economic data debate to the economists and stick to more ground-level indicators to base one's short- and medium-term stock bets on. For me, that means looking at insiders, and my confirming technical indicators.

If either of these now-positive metrics change (and they have proven able to change in short order twice already this year), I will change my bullish stance quickly. But even two weeks after going 100% invested, I still rate the opportunity cost of being scared out of this market as higher than the risk of losses from sticking with -- and adding to -- my insider-inspired positions.

Looking Under the Radar

And the number of my positions is easy to increase considering the immense population of stocks with significant insider buying over the past couple of months for me to research further. One recent addition is TriMas.

TriMas is a diversified industrial firm that makes engineered products for end markets as varied as packaging, energy, aerospace, automotive, recreational, defense and medical equipment. While some of Trimas' end markets may be negatively affected by a slowdown in consumer spending, if it comes, the majority of the firm's revenue is generated from industrial and energy customers. These markets are not only healthy, they also generate higher operating-profit margins.

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At the time of publication, Moreland was long Trimas, although holdings can change at any time.

Jonathan Moreland is director of research and publisher of the weekly publication InsiderInsights, founder of the Web site InsiderInsights.com and the director of research at Insider Asset Management LLC. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. While he cannot provide investment advice or recommendations, Moreland appreciates your feedback; click here to send him an email.