These 10  “Buy” Rated Stocks Have Significant Insider Buying Activity

Looking to trade stocks that have positive ratings and bullish indicators? Consider the following list of 10 stocks (and 2 penny stocks) with "buy" ratings and insider buying.  [Related List:  Short Sellers See Upside for These 5 Stocks Rated “Buy” by UBS]

To create the list we gathered the sell-side analyst ratings from reputable firms including Argus, Barclays, Canaccord Genuity, Collins Stewart, and Deutsche. We collected a list of stocks that had “Buy”, “Outperform”, or “Overweight” ratings.  We then screened for significant levels of net insider purchases in the past six months. 

Why It Matters – Insider Buying

Many analysts follow insider buying trends because, after all, insiders know more about their companies than anyone else. Their investment activity is closely monitored and can tell us a lot about where they feel the business is heading.

Insider buying is represented as a percentage of the share float. Companies experiencing insider buying over the past six months provide an indicator that insiders think the stock is undervalued at current levels. Inversely, insider selling serves as a negative indicator.

Why It Matters – Buy Ratings

A Sell-Side Analyst works for a brokerage to compose reports and forecast the markets for their clients.  They’ll typically focus on a specific industry and produce regular reports containing predictions on commodity prices and expected performance for a stock.

But be warned, every report produced by a sell-side analyst is called a “blanket recommendation” because they do not take into account the wants and needs of every individual. Investors must therefore determine if they are applicable to their own portfolio.

The List

Before considering the recommendations made by sell-side analysts, just remember that this is not private knowledge.  Information spreads fast and their optimism could already be priced in. 

Use this list as a starting point for your own analysis:

Interactive chart of average analyst ratings for the first 9 stocks listed. Not all have earned a collective buy rating. Press "play" to see how ratings have changed over time. 

 

1. Cracker Barrel Old Country Store, Inc. ( CBRL): Engages in the operation and development of the Cracker Barrel Old Country Store restaurant and retail concept in the United States. Market cap at $1.54B.

On 05/25/2012, Argus had a Buy rating on the stock. Over the last six months, insiders were net buyers of 274,262 shares, which represents about 1.49% of the company's 18.36M share float.  
 

2. Furiex Pharmaceuticals, Inc. ( FURX): Engages in the compound partnering business in the United States and Europe. Market cap at $334.17M.

On 01/28/2013, Canaccord Genuity had a Buy rating on the stock.  Over the last six months, insiders were net buyers of 481,326 shares, which represents about 7.27% of the company's 6.62M share float.  
 

3. Heritage-Crystal Clean, Inc ( HCCI): Provides industrial and hazardous waste services to small and mid-sized customers in the United States. Market cap at $282.98M.

On 02/24/2012, Needham had a Buy rating on the stock. Over the last six months, insiders were net buyers of 205,424 shares, which represents about 2.61% of the company's 7.86M share float.  
 

4. Navistar International Corporation ( NAV): Through its subsidiaries, manufactures and sells commercial and military trucks, buses, diesel engines, recreational vehicles (RVs), and chassis, as well as provides service parts for trucks and trailers. Market cap at $2.05B.

On 11/12/2012, Robert W. Baird had a Outperform rating on the stock. Over the last six months, insiders were net buyers of 4,064,960 shares, which represents about 7.91% of the company's 51.39M share float.  
 

5. PROLOR Biotech, Inc. ( PBTH): Engages in the development of proprietary versions of already-approved therapeutic proteins. Market cap at $306.27M.

On 08/29/2012, Oppenheimer had a Outperform rating on the stock. Over the last six months, insiders were net buyers of 1,005,000 shares, which represents about 2.59% of the company's 38.80M share float.  
 

6. Stewart Enterprises Inc. ( STEI): Provides funeral and cemetery products and services in the death care industry in the United States and Puerto Rico. Market cap at $694.43M.

On 07/03/2012, UBS had a Buy rating on the stock. Over the last six months, insiders were net buyers of 1,314,895 shares, which represents about 2.13% of the company's 61.68M share float.  
 

7. Tenet Healthcare Corp. ( THC): Operates acute care hospitals and related health care facilities. Market cap at $4.14B.

On 12/17/2012, Deutsche Bank had a Buy rating on the stock. Over the last six months, insiders were net buyers of 3,000,000 shares, which represents about 3.33% of the company's 90.03M share float.  
 

8. Tower International, Inc. ( TOWR): Operates as an integrated manufacturer of engineered structural metal components and assemblies to automotive original equipment manufacturers (OEMs) worldwide. Market cap at $190.15M.

On 12/28/2012, Robert W. Baird had a Outperform rating on the stock. Over the last six months, insiders were net buyers of 77,451 shares, which represents about 1.19% of the company's 6.49M share float.  
 

9. Vitesse Semiconductor Corp. ( VTSS): Engages in the design, development, manufacture, and marketing of semiconductor products to original equipment manufacturers (OEMs) of carrier and enterprise networking products, and data center infrastructure systems worldwide. Market cap at $73.74M.

On 12/19/2012, Needham had a Buy rating on the stock. Over the last six months, insiders were net buyers of 260,100 shares, which represents about 1.38% of the company's 18.84M share float.  
 

10. Westport Innovations Inc. ( WPRT): Provides alternative fuel, low-emissions technologies that enable engines to operate on fuels, such as compressed natural gas, liquefied natural gas, hydrogen, and biofuels. Market cap at $1.42B.

On 11/15/2012, Deutsche Bank had a Buy rating on the stock. Over the last six months, insiders were net buyers of 500,000 shares, which represents about 1.16% of the company's 43.24M share float.  
 

 

Two penny stocks also made the list:

1. Overland Storage, Inc. ( OVRL): A global provider of unified data management and data protection solutions designed to enable small and medium enterprises (SMEs), corporate departments, and small and medium businesses (SMBs) to anticipate and respond to change. Market cap at $28.01M, most recent closing price at $0.99. On 06/04/2012, Needham had a Buy rating on the stock. Over the last six months, insiders were net buyers of 478,244 shares, which represents about 3.11% of the company's 15.39M share float.  
 

2. Summer Infant, Inc. ( SUMR): A designer, marketer, and distributor of juvenile health, safety and wellness products, which are sold to North American and the United Kingdom retailers. Market cap at $32.63M, most recent closing price at $1.80. On 09/28/2012, Needham had a Buy rating on the stock. Over the last six months, insiders were net buyers of 825,002 shares, which represents about 8.31% of the company's 9.93M share float.  
 

 

( List compiled by Kapitall's Rebecca Lipman)

 

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