NEW YORK (Insider Monkey ) -- The insider trading arrests yesterday show how inside information can be funneled to hedge funds. The process makes hedge fund clients rich at the expense of unsophisticated ordinary investors.
Illegal insider trading is definitely profitable but relatively risky. It's possible to eliminate the risk but still profit from insider trading. Academic studies have shown this to hold true for the past 50 years and across the globe. Insider purchases beat index funds by more than 7 % per year when there are several insiders purchasing.
Two weeks ago we published the list of companies with at least three insiders buying. Six of the seven companies beat the index funds during the following week. Last week we published 6 more companies with insider purchases. Here is how those six stocks performed:
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