Tickers in this Article: SPLS, OMX, AOL, GM, F, MDT
Monitoring the purchases of insiders can prove to be an important screening tool for all types of investors. In theory, insiders are closer to the business than individual investors and may have additional insight that may not be readily apparent to an outsider. Here are four stocks that insiders have been snatching up. (For background reading, see What Investors Can Learn From Insider Trading.)

TUTORIAL: How To Use Short Selling

Shares of Staples (Nasdaq:SPLS) have been hammered to the tune of 27.3% so far this year. However, considering that the company is still trading at a forward P/E of just 10.5, this beating may be a bit too severe. One director for the company apparently believes so. On May 26, Robert Sulentic put down more than $250,000 in chips on the office products company.

Staples has not been the only player in the industry that has faced a heavy selloff. OfficeMax (NYSE:OMX) has shed more than half of its market value since the beginning of the year and now trades at a forward P/E of 9.7.

On May 27, an independent director for AOL (NYSE:AOL) picked up $30,000 worth of company stock at a price of $19.77 per share. Earlier this month, the entertainment company reported Q1 revenue that was down 17% on a year-over-year basis. Shares of AOL are down 15% year-to-date.

General Motors
A director for the automaker General Motors (NYSE:GM) bought up more than $240,000 worth of GM shares on May 26th via an indirect purchase. The buy was transacted at $30.58 per share. GM's stock price has declined 15.1% this year.

Edmunds.com is calling for GM to post a 2% sales increase for May over May 2010. The company's arch-rival Ford Motor Company (NYSE:F) is expected to see a slight downtick in sales over the same time period. The company has also seen its stock price hit a wall in 2011. Shares of Ford have slid 13% on the year.

One last stock for individual investors to take note of when it comes to insider purchases is the medical device maker Medtronic (NYSE:MDT). On Wednesday of last week, a director for the company bought a little more than $1 million worth of MDT shares at a price of $40.70 per share. Medtronic has seen its stock price rise 8.7% year-to-date.

The Bottom Line
It can be especially difficult to call a stock's bottom or determine when it has been oversold. In the instances of Staples, AOL and GM, it appears that insiders have seen enough and are prepared to step in and do just that. Before following their lead, investors are encouraged to carry out their own due diligence, but these stocks may be a good place to start your research.

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