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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Trend Report: 7 Insider and Hedge Fund Stock Picks to Consider

Mary-Lynn Cesar, Kapitall: Insider and hedge fund stock picks don't always overlap, but when they do it makes for an interesting list.

The following stock list is all about the investment habits of others. We're not talking about regular investors — we're focusing on insider and hedge fund stock pickers because they're among the most knowledgable investors out there.

[Read more from Kapitall: Will Drone Stocks Follow Rolls Royce into Shipping?]

Insiders are company employees and have valuable insight into their firm that other investors lack. They also are more familiar than most people with the industry, their competitors, and the demand for their goods and services. When these insiders decide to buy stock based on what they know about a company, their actions are either insider trading (illegal) or insider buying (legal).  

The nature of the information driving the investment marks the difference between the two. Insider trading uses privileged information that has yet to be disclosed while insider buying relies on public information and a strong belief that the company is undervalued.

Insider buying shows that company employees are bullish about the stock's future, so we began today's screen by constructing a universe of stocks with net insider buying in excess of 2% of share float over the past six months.

Next, we took a look at the habits of institutional investors. These investors pool tons of money together, which they then invest in securities and other financial assets. They employ experienced analysts who maintain a comprehensive understanding of the economic landscape and a company's finances. This allows the analysts to evaluate earnings potential and future growth in a way that a regular investor likely can't. Hedge funds, insurance companies, mutual funds, and pension funds are examples of these big money investors.

Therefore, when these investors buy a considerable amount of a company's stock, they also expect the stock to outperform in the future. We screened our list for stocks with significant net institutional purchases over the last quarter representing at least 5% of share float.

We were left with seven insider and hedge fund stock picks on our list.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,113.54 +61.81 0.36%
S&P 500 1,983.53 +9.90 0.50%
NASDAQ 4,456.0160 +31.3120 0.71%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs