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These 10 ¿¿Buy⿝ Rated Stocks Have Significant Insider Buying Activity

Tickers in this article: CBRL FURX HCCI NAV OVRL PBTH STEI SUMR THC TOWR VTSS WPRT

Looking to trade stocks that have positive ratings and bullish indicators? Consider the following list of 10 stocks (and 2 penny stocks) with "buy" ratings and insider buying.  [Related List:  Short Sellers See Upside for These 5 Stocks Rated “Buy” by UBS ]

To create the list we gathered the sell-side analyst ratings from reputable firms including Argus, Barclays, Canaccord Genuity, Collins Stewart, and Deutsche. We collected a list of stocks that had “Buy”, “Outperform”, or “Overweight” ratings.  We then screened for significant levels of net insider purchases in the past six months. 

Why It Matters – Insider Buying

Many analysts follow insider buying trends because, after all, insiders know more about their companies than anyone else. Their investment activity is closely monitored and can tell us a lot about where they feel the business is heading.

Insider buying is represented as a percentage of the share float. Companies experiencing insider buying over the past six months provide an indicator that insiders think the stock is undervalued at current levels. Inversely, insider selling serves as a negative indicator.

Why It Matters – Buy Ratings

A Sell-Side Analyst works for a brokerage to compose reports and forecast the markets for their clients.  They’ll typically focus on a specific industry and produce regular reports containing predictions on commodity prices and expected performance for a stock.

But be warned, every report produced by a sell-side analyst is called a “blanket recommendation” because they do not take into account the wants and needs of every individual. Investors must therefore determine if they are applicable to their own portfolio.

The List

Before considering the recommendations made by sell-side analysts, just remember that this is not private knowledge.  Information spreads fast and their optimism could already be priced in. 

Use this list as a starting point for your own analysis:

Interactive chart of average analyst ratings for the first 9 stocks listed. Not all have earned a collective buy rating. Press "play" to see how ratings have changed over time. 

 

1. Cracker Barrel Old Country Store, Inc. ( CBRL): Engages in the operation and development of the Cracker Barrel Old Country Store restaurant and retail concept in the United States. Market cap at $1.54B.

On 05/25/2012, Argus had a Buy rating on the stock. Over the last six months, insiders were net buyers of 274,262 shares, which represents about 1.49% of the company's 18.36M share float.  
 

2. Furiex Pharmaceuticals, Inc. ( FURX): Engages in the compound partnering business in the United States and Europe. Market cap at $334.17M.

On 01/28/2013, Canaccord Genuity had a Buy rating on the stock.  Over the last six months, insiders were net buyers of 481,326 shares, which represents about 7.27% of the company's 6.62M share float.