Profit From the Insiders' Data

06/04/08 - 12:59 PM EDT

Jonathan Moreland

Into penny stocks? These names are underrepresented in many data flows, like purely fundamental screening tools. But insiders at exchange-traded companies of any size are required to file Form 4s. And the investment intelligence they relay is often the only unbiased information you'll find for small- and micro-caps shunned by the analyst crowd.

But my value-added insider tables and screens are just the start, because I don't just generate this information for you -- I also use it in my own investment process. So every week, I also list the companies I found in my insider info stream that look promising enough for me to research further, on both the long and short side. I also have an ongoing Recommended List of insider-inspired positions that I update right up until I recommend selling them.

Other services generate insider lists based on some scoring mechanism. But insider data is qualitative by nature, and automated grading paradigms often miss nuances in the patterns of trades produced by individuals and clusters of insiders. There is really no substitute for digging into the data to determine the significance of transactions. That's what I love, and that's what I do -- so you don't have to.

So come inside, and be a fly on the wall of every executive suite and boardroom in America. You may not know what these insiders know when they trade, but you can certainly know what they do. And this information is arguably just as good.

Whether you use the newsletter's tables as a first screen to jump-start your own investment process, or whether you choose to jump on board my personal favorites, TheStreet.com InsiderInsights is there for you.

This article was written by Jonathan Moreland, whose newsletter, "TheStreet.com InsiderInsights," parses mounds of data on insider trades to find investable ideas.

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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.
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