In a victory for common sense, the trading behavior of company executives, directors, and large shareholders in the stocks of firms they're registered "insiders" at have been proven profitable to monitor by both academic studies and (more importantly) the experience of your fellow professional investors.
Below are lists of the top 10 mainly open-market insider purchases and sales filed at the Securities and Exchange Commission Wednesday, February 20, 2013 as ranked by dollar value.
Please note, however, that these are factual lists, not buy and sell recommendations. Dollar value is only one metric to assess the importance of an insider transaction, and, frankly, often not even the most important metric that determines if an insider transaction is significant.
In insider purchases, multi-national pharmaceutical company GlaxoSmithKline (GSK) bought $2,567,090 worth of Theravance (THRX), of which it is a beneficiary owner. Theravance specializes in small molecule medicines intended for the therapy of respiratory diseases, bacterial infections, and central nervous system pain. Investment management firm Cannell Capital, beneficiary owner of voice, data, and video service provider Multiband (MBND), bought $444,706 worth of the company. Thomas Siering, President and CEO of real estate investment trust Two Harbors (TWO), bought $211,680 worth of company stock.
In insider sales, Apollo Management Holdings GP, a beneficiary owner of LyondellBasell (LYB), sold $1,532,000,000 worth of company stock. LyondellBasell manufacturers chemicals and polymers, refines crude oil, produces gasoline blending components, and develops technologies for the production of polymers. At Sensata Technologies (ST), which manufactures and sells sensors and controls, beneficiary owner Bain Capital sold $953,033,984 worth of company stock. At health care services company HCA (HCA), there were two big sales, with KKR Millennium Fund selling $856,746,048 worth of company stock and Bain Capital selling $845,746,048 worth of company stock. There were also two sales at LinkedIn (LNKD), with Co-Founder and Director Reid Hoffman selling $13,276,458 worth of company stock and CEO Jeff Weiner selling $6,424,900 worth of company stock.
At InsiderInsights.com, we find new investment ideas just about every day using these and more intricate insider screens to determine where we should focus our subsequent fundamental and technical analysis. And while stocks don't (or shouldn't) move up or down based on insider activity alone, insiders tend to be good indicators of when real stock-moving events like earnings surprises, corporate actions, and new products may be in the offing.
|3||Siering Thomas||CEO,PR,DIR||Two Harbors||TWO||B||$211,680|
|4||Eberwein Jeffrey||BO||Endeavour Intl||END||B||$172,600|
|5||Frost Phillip MD||CEO,CB,BO||Opko Health||OPK||B||$168,553|
|6||Wulff John K||DIR||Moodys||MCO||B||$140,250|
|7||VN Capital Mgt||BO||Breeze Eastern||BZC||B||$125,181|
|8||Sherwin Elton||DIR||Peregrine Semi||PSMI||B||$111,090|
|9||Rosenberg Sheli Z||DIR||Nanosphere||NSPH||B||$98,745|
|10||Thornley Anthony S||DIR||Peregrine Semi||PSMI||B||$92,500|
|1||Apollo Mgt Gp||BO||Lyondellbasell||LYB||JS*||$1,532,000,000|
|2||Bain Capital||BO||Sensata Tech||ST||JS*||$953,033,984|
|3||Kkr Millennium Fund||BO||HCA||HCA||JS*||$856,746,048|
|5||Blackstone Mgt||BO||Team Health||TMH||JS*||$318,450,368|
|7||Hayford Michael D||VP,CFO||Fidelity Natl Info||FIS||S||$13,228,201|
|8||Redstone Sumner M||CB,DIR,BO||CBS||CBS||JS*||$12,468,440|
|10||National Health||BO||National Health||NHC||JS*||$4,700,000|
Editor's note: Jonathan Moreland is the founder of Insider Insights and author of "Profit From Legal Insider Trading."