There is a reason why companies with big insider purchases tend to beat Wall Street expectations and it is not luck, said David Miller, portfolio manager for the Catalyst Insider Buying Fund. Miller's fund has outperformed the S&P 500 by more than 5 percentage points over the past year. Miller said he is seeing big insider buying in energy sector names like Consol Energy and Chesapeake due to management optimism about production growth in America. Finally, Miller said investors should avoid high-multiple, "story stocks" like Twitter, Tesla and Groupon because of the big bursts of insider selling associated with lock-up expiration.
TheStreet’s Fundamentals of Investing Course will teach you the keys to making the right decisions in any market.
TheStreet’s Personal Finance Essentials Course will teach you money management basics and investing strategies to help you avoid major financial pitfalls.
TheStreet Courses offers dedicated classes designed to improve your investing skills, stock market knowledge and money management capabilities.
More from Video
Short-Term Versus Long-Term Investing: Which Is the Better Investment?
Should investors consider short-term or long-term investing when they compile their portfolio? Here's what Carol Schleif, deputy chief investment officer at Abbot Downing.
From Mega Millions to Powerball: Biggest Lottery Jackpots Since 2016
The odds of winning the Mega Millions jackpot and the Powerball jackpot are 1 in 303 million and 1 in 292 million respectively, according to Lottery USA.
Jim Cramer Explains What a Trade War With China Means for Tesla
Tesla stock continues to tumble. Jim Cramer opines if ongoing trade tensions with China are to blame.
Jim Cramer's Take on Best Buy, L Brands, and Foot Locker - Retail Roundup
What should investors take away from Best Buy and L Brands earnings' reports? Jim Cramer rounds up retail and looks ahead to Foot Locker's earnings' report Friday before the bell.