This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

What the Insider Crowd's Buying

I am actually overweighted energy myself. There's a saying that it's better to light a candle than curse the darkness. Seems to me that it's also better to own some energy stocks than to complain about high prices at the pump.

Yielding to Insiders

The most pronounced trend in recent insider buying, however, crosses industry lines and probably will surprise quite a few investors. Nearly a quarter of the 107 companies that made it through my initial screens for significant buying over the past three weeks have an indicated yield of 3.2% or more!

Considering that concern about rising interest rates is viewed as a major cause of the recent selloff, it seems counterintuitive for executives to be so obviously leaning toward higher-yielding securities. After all, these stocks will be hurt if higher-yielding bonds start to compete for the attention of income investors. Yet the trend is very clear.

Now, I am not ready to read into this trend that some group of yield-purchasing execs "knows" that the Fed will pause in its raising regimen when it next meets. I don't even believe the Fed governors know what specific economic data they will be dealing with weeks from now when it comes time to make their decision.

But I am ready to read into the buying that the yields of the securities purchased are almost certainly sustainable. And considering the very high yields of some of these securities, they do look pretty attractive right here and now.

Mortgage Mania

The sector most heavily represented in the high-yielding group may also surprise you: mortgage REITs. If the sky hovering over the real-estate market is indeed about to fall, Chicken Little forgot to visit the executive suites at these firms. Of course, the stocks in this sector already took a huge hit late last year when a flat and inverting yield curve ruined the carry trade that many of these REITs depended on to make money in their investment portfolios. Perhaps what insiders are signaling now is simply that the worst is over.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
NRGY $14.97 2.11%
MMR $0.00 0.00%
FST $0.20 -4.76%
NRF $16.00 0.00%
ARC $6.91 0.00%

Markets

Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs