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Stocks that Both Gurus and Insiders are Buying

April 11, 2007 | About:
10qk

Stocks that Both Gurus and Insiders are Buying

Do you want to know that stocks both Gurus and Insiders are buying? GuruFocus is very glad to announce that we have added Insider Buys as a free feature to our readers, in addition to the Guru stock picks and portfolios we have been tracking.

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.

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).

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.

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.

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.

Access right of Guru and Insider Buys

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Latest List of Companies that Insiders have bought
Latest List of Companies that their CEO bought
 
Latest List of Companies that their CFO bought
 
Companies that Insiders bought the most
 
 
Companies that both Gurus and Insiders are buying
 
 
Companies that both Gurus and Insiders are buying, and Company is buying back shares
 
 

 


Rating: 2.8/5 (101 votes)

Comments

barrettltd
Barrettltd - 7 years ago
Sounds like an excellent extension to your service. I am now thinking of signing up to your premium service. However, would prefer to have insider buy information over a longer period than 3 months. I think 12 months would be very good. Thanks.
gurufocus
Gurufocus premium member - 7 years ago
Current our insider data goes back to Sept 30, 2006.
danielw
Danielw - 7 years ago


Li Ka-Shing has been increasing his stake in Cheung Kong, while Whitman has been adding to his already huge position in the company.

Hutchison, a unit of Cheung Kong, has been increasing its stake in Hutchison Telecom--which Seth Klarman recently took a position in.

So, the founder and largest shareholder is buying more. The company is buying up more of itself. And two different gurus are buying the company--one seeing value in the whole and another in a certain part.

I'd say that's at least a triple buy signal. At any rate, it's interesting. Cheung Kong is basically Asia's Berkshire Hathaway so I'm surprised it doesn't get more coverage on the value investing web sites...
docnbox57
Docnbox57 - 7 years ago
u might consider adding stock splits to this amazing site
karin schoenherr
Karin schoenherr - 7 years ago
Hi docnbox57,

the idea of adding stock splits to this site appears strange to me. A stock split does nothing to the value of an enterprise.
shadoli
Shadoli - 7 years ago
When I have something to say I will tell you - Gerry Hoffman
billytickets
Billytickets - 7 years ago
USG has insiders ,gurus and members of the same industry ALL 3 investing
lglpro
Lglpro - 7 years ago
Thank God I found this site.
danielw
Danielw - 7 years ago


Wow. Just saw my past message on Cheung Kong Holdings--forgot about that one. For those interested it's up over 30% since that triple buy signal I posted. (I no longer own it.)

The only Hong Kong stock I continue to own is Henderson Land, run by Asia's Warren Buffett: Lee Shau Kee. This one makes up 7.5% of Marty Whitman's Third Avenue Value fund, probably more given its move upward since the last report (when he added).

As was the case with Cheung Kong, the Company has been increasing its stake in the Companies it owns, most notably buying a huge interest in HK and China Gas back from Henderson Investment (which it has previously failed to take private).

Lee was cautious about the HK stock market a while back but made news recently when he said that he had invested the first billion out of 10--and sees the market going up basically 20% more by Chinese New Year. Unfortunately, he didn't mention buying Henderson Land...so the signal isn't quite as clear from an insider/big shareholder point of view.

--Daniel
avocade
Avocade - 5 years ago
Great stuff. Best investment site I've come across as of yet, and that doesn't say little.
bushwacked
Bushwacked - 4 years ago
STOCK SPLITS HAD VERY MUCH TO DO ABOUT PRICE, BEFORE THE SPLIT. SUCH AS STOCK REVERSE SPLITS... I KINDA KNOW ABOUT IT, FOR I HAVE BEEN THRU MANY OF BOTH. THE REVERSE SPLIT HAS BEEN MIGHTY BAD FOR ME.
windplayer13
Windplayer13 premium member - 3 years ago
Insider buys can be a great indicator if insiders are not trading stock futures or credit default swaps against the stock position they are disclosing to the general public. Do any lawyers know if insiders have to disclose their position on single stock futures or credit default swaps? (assuming insiders do not take possession of the underlying stock)
Steven Hurwitz
Steven Hurwitz - 2 years ago
When mentioning a stock it would be helpful if you would include the stock's symbol as well. Thanks

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