James Dennin, Kapitall: Stocks are rebounding today on strong earnings. We looked for insider buying spikes among stocks with earnings next week.
Stocks had a good day yesterday with all three major indices advancing. A lot of the advances came from technology and growth plays:
Solar City (SCTY)
among the biggest gainers.
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Social media companies have been pressured all year by high valuations, with an ETF focused on the sector
falling 8 of the last 11 days
. That sell-off, however, seems to have been enough to make some of these companies attractive again.
At least in the short term.
Small caps and internet companies have underperformed considerably. Conversely, some of the year's performers have been high-yield dividend stocks like utilities. We decided to find some plays that could benefit if the trend continues into the next couple weeks of earnings season.
One good way to screen for potential earnings surprises, particularly among smaller companies, is by looking for
spikes in insider buying
. Insider buying is when workers at the company buy shares or add to their position.
At large companies, this often isn't the sign of anything particularly interesting. One employee rarely has access to information that's going to greatly affect the entire company at large.
However, smaller companies are a lot more cohesive. When insiders act on information, it is generally seen as a possible indicator that people working at the company expect growth in the future. We screened all the stocks with earnings next week for companies experiencing a spike in insider buying.
We were left with 5 stocks on our list.
Click on the interactive chart to view data over time.
Do you expect strong earnings from these stocks? Use the list below as a starting point for your own analysis, and let us know what you think in the comments.