Do you like to follow the trends of company insiders? Do you consider accounting trends before making an investment? If so, this stock list may be of interest to you.
Insiders, naturally, work at the companies in question and have more knowledge about the firm than outsiders. When they put their own money on the line to purchase their company's shares it indicates they are bullish about the firm's future, and believe current share price is undervalued.
With this in mind we collected data on insider buying, and identified the names that have seen bullishness from company executives, with net insider purchases representing at least 1% of share float.
We then decided to look for
positive fundamental trends are an encouraging sign for investors. From our list, we analyzed the financials of the companies to look for those stocks with strong sales trends, comparing growth in revenue to growth in accounts receivable. Since accounts receivable is the portion of revenue not yet received, and there is no guarantee the money will ever be received, the smaller the portion of revenue made up of receivables, the healthier the company's revenue.
These stocks are seeing faster growth in revenue than accounts receivable year-over-year, as well as accounts receivable comprising a smaller portion of current assets over the same time period.
Business Section: Investing Ideas
The following 7 stocks made our list. Do you think insiders are right to invest in these names? Use this as a starting point for your own analysis.
List Average 1-Year Return: 6%
1. AGCO Corporation
): Distributes agricultural equipment and related replacement parts worldwide. Market cap at $4.87B, most recent closing price at $50.22.
Over the last six months, insiders were net buyers of 3,008,381 shares, which represents about 3.24% of the company's 92.96M share float.