10 Stocks Insiders And Hedge Funds Think Will Go Higher

One way to pinpoint companies with bullish sentiment is by looking at company insider buying trends. After all, company insiders such as upper management and members of the board know more about their companies than any other investors.

It’s what makes watching insider buying so interesting. Whenever shares are sold, analysts and investors question the motivation. Did the insider sell because they need more liquidity to buy a new car, pay medical bills or go on vacation? Or does the insider simply think the shares are overvalued and likely to drop in value? There are several possibilities.  But when insiders start to buy up shares of their company, there’s really only one good explanation: They think share price is undervalued and are  confident there is more upside potential . Of course, these predictions aren’t always realized, but it’s a strong indicator for outsiders to go by

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Insider activity alone isn’t enough to actually shift market prices. This day and age it’s the work of hedge funds that make it their daily business to buy, sell and move millions of shares every day that really get share prices moving. But hedge funds pay attention to insiders too, so insider activity can set a spark that puts institutional buying (or selling) in action.

THE LIST

So we were wondering, which companies have seen the greatest level of buying activity from insiders?

To create this list, we started with a universe of 85 companies reporting significant insider buying over the last six months.

To refine the list, we collected data on institutional transactions, and identified the names that have seen significant inflows during the current quarter.

[Compare our final list below with the results of the same screen run on January 23, 2013. That list has an average 1-year return of 30%.]

Sophisticated investors, like hedge fund managers, think these names are going higher. Insider executives seem to agree – do you? List average 1-year return at 67%

 

1. Aegerion Pharmaceuticals, Inc. ( AEGR): Engages in the development and commercialization of novel therapeutics to treat severe lipid disorders. Market cap at $1.B.

Net institutional purchases in the current quarter at 3.5M shares, which represents about 16.44% of the company's float of 21.29M shares.

Over the last six months, insiders were net buyers of 624,767 shares, which represents about 2.93% of the company's 21.29M share float.

Warning: Short sellers, who benefit when share price falls, are not as optimistic. They have been increasing their short positions month over month: Shares shorted have increased from 2.48M to 2.73M over the last month, an increase which represents about 1.17% of the company's float of 21.29M shares. Days to cover ratio at 5.29 days.

 

2. Dole Food Company Inc. ( DOLE): Engages in sourcing, growing, processing, marketing, and distributing fresh fruits and vegetables, and food products to wholesale, retail, and institutional customers worldwide. Market cap at $1.03B.

Net institutional purchases in the current quarter at 12.1M shares, which represents about 23.52% of the company's float of 51.45M shares.

Over the last six months, insiders were net buyers of 4,228,484 shares, which represents about 8.22% of the company's 51.45M share float.

Short seller alert: Shares shorted have increased from 6.75M to 8.36M over the last month, an increase which represents about 3.13% of the company's float of 51.45M shares. Days to cover ratio at 5.93 days

 

3. Infinity Pharmaceuticals, Inc. ( INFI): Engages in the discovery and development of medicines for the treatment of cancer and other conditions in the United States. Market cap at $1.81B.

Net institutional purchases in the current quarter at 11.3M shares, which represents about 48.37% of the company's float of 23.36M shares.

Over the last six months, insiders were net buyers of 5,380,195 shares, which represents about 23.03% of the company's 23.36M share float.

 

4. Janus Capital Group, Inc. ( JNS): A publicly owned asset management holding company. Market cap at $1.8B.

Net institutional purchases in the current quarter at 20.7M shares, which represents about 11.07% of the company's float of 187.06M shares.

Over the last six months, insiders were net buyers of 30,846,700 shares, which represents about 16.49% of the company's 187.06M share float.

 

5. Lexicon Pharmaceuticals, Inc. ( LXRX): Focuses on the discovery and development of drug candidates for the treatment of various human diseases. Market cap at $1.09B.

Net institutional purchases in the current quarter at 12.5M shares, which represents about 5.51% of the company's float of 226.83M shares.

Over the last six months, insiders were net buyers of 3,000,000 shares, which represents about 1.32% of the company's 226.83M share float.

 

6. MannKind Corp. ( MNKD): Focuses on the discovery, development, and commercialization of therapeutic products for diabetes and cancer. Market cap at $803.77M.

Net institutional purchases in the current quarter at 12.7M shares, which represents about 10.17% of the company's float of 124.84M shares.

Over the last six months, insiders were net buyers of 39,997,650 shares, which represents about 32.04% of the company's 124.84M share float.

 

7. 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 $2.55B.

Net institutional purchases in the current quarter at 14.8M shares, which represents about 28.7% of the company's float of 51.57M shares.

Over the last six months, insiders were net buyers of 3,353,100 shares, which represents about 6.5% of the company's 51.57M share float.

Short seller alert: Shares shorted have increased from 13.86M to 14.52M over the last month, an increase which represents about 1.28% of the company's float of 51.57M shares. Days to cover ratio at 7.36 days.

 

8. Pacific Biosciences of California, Inc. ( PACB): Develops, manufactures, and markets an integrated platform for genetic analysis. Market cap at $137.03M.

Net institutional purchases in the current quarter at 3.1M shares, which represents about 9.44% of the company's float of 32.84M shares.

Over the last six months, insiders were net buyers of 1,400,000 shares, which represents about 4.26% of the company's 32.84M share float.

 

9. Parkway Properties Inc. ( PKY): Engages in the operation, acquisition, ownership, management, and leasing of office properties. Market cap at $986.63M.

Net institutional purchases in the current quarter at 15.6M shares, which represents about 50.81% of the company's float of 30.70M shares.

Over the last six months, insiders were net buyers of 5,848,000 shares, which represents about 19.05% of the company's 30.70M share float.

Short seller alert: Shares shorted have increased from 1.99M to 2.50M over the last month, an increase which represents about 1.66% of the company's float of 30.70M shares. Days to cover ratio at 7.05 days.

 

10. SandRidge Energy, Inc. (SD): Operates as an independent natural gas and oil company in the United States. Market cap at $2.85B.

Net institutional purchases in the current quarter at 36.5M shares, which represents about 16.65% of the company's float of 219.27M shares.

Over the last six months, insiders were net buyers of 7,971,966 shares, which represents about 3.64% of the company's 219.27M share float.


 

( List compiled by Kapitall Editor Rebecca Lipman )

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