By The Sizemore Letter<\/u><\/p>\n
I\u2019ve written recently about insider buying (see \u201cTwo REITs With Insider Buying<\/a>\u201d and \u201cKinder Morgan Insiders Backing Up the Truck<\/a>\u201d).<\/p>\n As I wrote before, company insiders can sell their company\u2019s stock for any number of reasons.\u00a0 Perhaps they are diversifying or reallocating their portfolios, or perhaps they decided to pony up for a beach house.<\/p>\n But there is only one reason why company insiders would buy<\/i> their company\u2019s stock, and that is because they consider it underpriced and due for a bounce.<\/p>\n With that in mind, I ran a stock screen for insider \u201ccluster buys,\u201d<\/a> or large purchases by multiple insiders.\u00a0 In order to make the cut, a stock had to have multiple, unique insider buys over the past three months.\u00a0 And with no further ado, here is a list of the top five ranked by number of insider buys:<\/p>\n Aircastle Ltd (<\/span>AYR<\/a>)<\/span><\/strong>:\u00a0 21 insider buys for a total 663,400 shares.<\/p>\n RLJ Entertainment (<\/span>RLJE<\/a>)<\/span><\/strong>: 12 insider buys for a total of 30,082 shares<\/p>\n ERF Wireless Inc (<\/span>ERFB<\/a>)<\/span><\/strong>: 9 insider buys for a total of 229,412 shares<\/p>\n Remax Holdings Inc (<\/span>RMAX<\/a>)<\/span><\/strong>: 9 insider buys for a total of 51,450 shares<\/p>\n Main Street Capital Corp (<\/span>MAIN<\/a>)<\/span><\/strong>:\u00a0 9 insider buys for a total of 6,113 shares<\/p>\n Of each of these stocks, only two have had significant price movements since the insider trading began.\u00a0 ERF Wireless is down 72% and Remax is up 37%.<\/p>\n An insider buying screen does not constitute exhaustive research, of course.\u00a0 You still need to roll up your sleeves and investigate any stock before you buy it. But a screen like this can be a useful first step. If the insiders are buying, it\u2019s a stock that is worth a look.<\/p>\n Charles Lewis Sizemore, CFA, is the editor of the\u00a0Sizemore Investment Letter<\/a>\u00a0and the chief investment officer of investments firm Sizemore Capital Management.\u00a0Click here<\/a>\u00a0to learn about his top 5 global investing trends and get your copy of \u201cThe Top 5 Million Dollar Trends of 2013.\u201d \u00a0This article first appeared on TraderPlanet<\/a>.<\/em><\/p>\n This article first appeared on Sizemore Insights as Top Five Stocks With Insider Buying<\/a><\/p>\n