GuruFocus has been tracking the stocks picks of Gurus, and the stocks that company executives are actively buying. How to generate the best ideas from Stocks that both Gurus and Insiders are buying? We have recently updated some of the features.
We believe that by tracking the stock picks of value Gurus we “stand on the shoulders of giants”. Most of the Gurus we track are buy and hold value investors. They do extensive research before they buy a stock. They tend to hold a stock for long time after they buy. Their purchases provide us a long term perspective of the companies’ business.
Still we are generating too many ideas from the Gurus’ picks. We have created the free features like “Consensus Picks” and “Guru Bargains” to narrow down to the best choices. Premium Members can access to tools such as Sector Picks, and Guru screener to locate ideas in particular industries, market caps and other criteria. By setting up their Personalized List of Gurus, Premium Members can focus on the Gurus that fit their own investment style.
Still, we need more conviction. That is why we add Insider Buys as another position sign for stock picks. Especially with Insider Buys we can track the stock purchases of company officers and directors within two business days after they purchase. We have filtered the data so that only the ones that are purchased at market prices are listed. This provides us a current view of the company officers and directors on the valuation of their stocks. It is a great compliment to the Gurus long term perspective of the companies’ business.
Why Insider Buys are positive?
One of the greatest investors of all time, Peter Lynch, was noted as saying that "insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise".
Not all insiders are created equal. One long-term study published a few years ago showed that top executives of companies beat the market on average by six percentage points a year. Over 20 years that's the difference between turning $10,000 into $67,000 and turning it into $194,000. To focus the top executives, we created the FREE features of CEO Buys and CFO Buys, where registered members can browse through the latest purchases of stocks by their own company CEOs and CFOs. (If you are not registered, please register here, it is FREE).
UPDATE: In order to let our members be more focused, we have added a filtering function to Insider Buys so that members can filter the Insider Buys by the number of shares. You can set the number of shares so that only the largest insider buys are listed. For instance, if we set to display the Insider Buys with shares of at least 100,000, we see that Chairman of the Board of American Eagle Outfitters Inc.(AEO) bought more than 800,000 shares on Sept. 7. We also see Chairman of Board & CEO of Compuware Corp. (CPWR) bought 200,000 shares of its stocks at $7.77 two weeks ago. With this feature users can find the recent largest insider buys, which are more important than others.
Insider Cluster Buys
Is it even better if multiple officers and directors are buying their company stocks with their own funds? Absolutely! One Citibank’s study found that multiple purchases by several execs within the past three months signaled big gains to come, as did, predictably, purchases at small companies with limited analyst coverage, and the biggest returns were found after insider buys of undervalued stocks.
With our new premium feature of Insider Cluster Buys you can browse the stocks that multiple company officers and directors have bought. You can browse by the number of buying activities and the number of unique insider buys during the past 3 months.
UPDATE: You can now check the Insider Cluster Buys within different time periods such as 1 week, 2 weeks, 1 month, 2 months, 3 months. You can also sort the list by the number of buys, or by the number of unique insiders that are buying, or by the total number of shares bought. It is surprising to see that some stocks are bought by 7 unique company executives within the past 30 days. Does that mean growth potential ahead?
Double Buys: Both Gurus and Insiders are Buying
Insider buys of undervalued companies creates big gains. But how can we know if a stock is undervalued? Let’s turn to our Gurus. Value Gurus tend to buy stocks that are undervalued. If we found stocks that our Gurus bought, and multiple company officers and directors are also buying, are they interesting?
They may not be 100% winners, but this pool of stocks is certainly great place for you to begin your homework.
UPDATE: you can now filter Double Buys by number of shares insider bought, number of Gurus that were buying, and number of insiders that were buying. These filters will help members to find the stocks that both Gurus and Insiders are buying. This is a Premium feature. If you are not a Premium Member, you are invited for a 7-day FREE TRIAL.
Triple Buying Signals: Gurus and Insiders are Buying, and Companies are buying back shares!
How about adding another criteria, whether the company is also buying back shares? Now we have 3 great positive signals: Gurus buy, Insiders buy and companies are buying back. These 3 conditions are extremely strict, only very small number of stocks can pass this test. We developed a Triple Buying Screener for Premium Members to screen stocks based on these 3 signals.
To find more about the stocks that pass these screening criteria, go to Triple Buys.
We believe that by tracking the stock picks of value Gurus we “stand on the shoulders of giants”. Most of the Gurus we track are buy and hold value investors. They do extensive research before they buy a stock. They tend to hold a stock for long time after they buy. Their purchases provide us a long term perspective of the companies’ business.
Still we are generating too many ideas from the Gurus’ picks. We have created the free features like “Consensus Picks” and “Guru Bargains” to narrow down to the best choices. Premium Members can access to tools such as Sector Picks, and Guru screener to locate ideas in particular industries, market caps and other criteria. By setting up their Personalized List of Gurus, Premium Members can focus on the Gurus that fit their own investment style.
Still, we need more conviction. That is why we add Insider Buys as another position sign for stock picks. Especially with Insider Buys we can track the stock purchases of company officers and directors within two business days after they purchase. We have filtered the data so that only the ones that are purchased at market prices are listed. This provides us a current view of the company officers and directors on the valuation of their stocks. It is a great compliment to the Gurus long term perspective of the companies’ business.
Why Insider Buys are positive?
One of the greatest investors of all time, Peter Lynch, was noted as saying that "insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise".
Not all insiders are created equal. One long-term study published a few years ago showed that top executives of companies beat the market on average by six percentage points a year. Over 20 years that's the difference between turning $10,000 into $67,000 and turning it into $194,000. To focus the top executives, we created the FREE features of CEO Buys and CFO Buys, where registered members can browse through the latest purchases of stocks by their own company CEOs and CFOs. (If you are not registered, please register here, it is FREE).
UPDATE: In order to let our members be more focused, we have added a filtering function to Insider Buys so that members can filter the Insider Buys by the number of shares. You can set the number of shares so that only the largest insider buys are listed. For instance, if we set to display the Insider Buys with shares of at least 100,000, we see that Chairman of the Board of American Eagle Outfitters Inc.(AEO) bought more than 800,000 shares on Sept. 7. We also see Chairman of Board & CEO of Compuware Corp. (CPWR) bought 200,000 shares of its stocks at $7.77 two weeks ago. With this feature users can find the recent largest insider buys, which are more important than others.
Insider Cluster Buys
Is it even better if multiple officers and directors are buying their company stocks with their own funds? Absolutely! One Citibank’s study found that multiple purchases by several execs within the past three months signaled big gains to come, as did, predictably, purchases at small companies with limited analyst coverage, and the biggest returns were found after insider buys of undervalued stocks.
With our new premium feature of Insider Cluster Buys you can browse the stocks that multiple company officers and directors have bought. You can browse by the number of buying activities and the number of unique insider buys during the past 3 months.
UPDATE: You can now check the Insider Cluster Buys within different time periods such as 1 week, 2 weeks, 1 month, 2 months, 3 months. You can also sort the list by the number of buys, or by the number of unique insiders that are buying, or by the total number of shares bought. It is surprising to see that some stocks are bought by 7 unique company executives within the past 30 days. Does that mean growth potential ahead?
Double Buys: Both Gurus and Insiders are Buying
Insider buys of undervalued companies creates big gains. But how can we know if a stock is undervalued? Let’s turn to our Gurus. Value Gurus tend to buy stocks that are undervalued. If we found stocks that our Gurus bought, and multiple company officers and directors are also buying, are they interesting?
They may not be 100% winners, but this pool of stocks is certainly great place for you to begin your homework.
UPDATE: you can now filter Double Buys by number of shares insider bought, number of Gurus that were buying, and number of insiders that were buying. These filters will help members to find the stocks that both Gurus and Insiders are buying. This is a Premium feature. If you are not a Premium Member, you are invited for a 7-day FREE TRIAL.
Triple Buying Signals: Gurus and Insiders are Buying, and Companies are buying back shares!
How about adding another criteria, whether the company is also buying back shares? Now we have 3 great positive signals: Gurus buy, Insiders buy and companies are buying back. These 3 conditions are extremely strict, only very small number of stocks can pass this test. We developed a Triple Buying Screener for Premium Members to screen stocks based on these 3 signals.
To find more about the stocks that pass these screening criteria, go to Triple Buys.
