Learn more about Insider Trade Reports
Profit legally from insider trading.
It was the first week of March 2009 when I received an email from a friend asking me to check out a company called Culp (CFI) that made furniture upholstery and mattress fabrics. Having endured one of the worst bear markets since the great depression and watching every asset class drop simultaneously, my appetite for starting a new position was low. I listened with skepticism, especially because shorting furniture companies was one of five themes I had listed in September 2007 to hedge a long only portfolio.
As a passionate value investor I had a checklist that I ran every new investment idea through to figure out if it was worth exploring further. One of the items on my checklist included reviewing recent insider trades. When I checked out insider transactions for Culp (CFI), I noticed that insiders had started buying the stock in December 2008 when it was trading as low as $1.61 per share. In the span of three weeks, four members of the management team including the Chairman, the CEO, the President and the CFO along with two Directors had purchased shares on the open market. Even the wife of Chairman Robert Culp III decided to buy some shares.
These insider purchases continued until the Fall of 2009 even as the stock price more than tripled. The stock eventually went on to become a “ten bagger” (a term Peter Lynch used to describe stocks that had returned more than 10 times their original investment) and peaked just over $16 in the first quarter of 2010.
This little experience made me rethink my investment philosophy and was the spark that kindled my interest in event driven investment strategies such as Insider Transactions and Merger Arbitrage, eventually leading to the launch of this site dedicated to insider trading.
Outperformance of an Insider Trading Strategy:
Company insiders are required by the U.S. Securities and Exchange Commission (SEC) to electronically file a form called the Form 4 listing their insider purchases and sales within two business days following an insider transaction.
Over four decades of academic research has shown that by following in the footsteps of company insiders and buying the stocks that they are buying, you can outperform the market by 6% to 10.2% per year.
While this may not seem like much, $100,000 invested in the S&P 500 index on January 1, 2001 would have grown to $115,640 after a full decade, achieving an annualized rate of return of just 1.48%. However the same $100,000 growing at a 11.48% annualized rate would have nearly tripled to $296,462, a difference of $180,822 on a $100,000 investment.
The goal of Insider Trade Reports is to help you exploit this edge by presenting you with clean actionable information through a daily email alert that highlights notable insider buying and selling from the previous day. We work through the filings every night, filter out the noise and do all the leg work for you so that you can spend your time analyzing the companies and making investment decisions.
This service does not tell you what to buy or sell but generates ideas for further research. We do indicate which stocks we are purchasing or selling from our portfolios.
Things you can expect from this service:
Daily emails from Tuesday through Friday that highlight the top insider purchases and sales from the previous day after clearing out all the noise and transactions by funds.
- A proprietary model that rates these purchases on a simple 1 to 10 scale that helps you decide which stocks to explore and which ones to avoid. The model looks at 20 different criteria including recent insider purchases to rate stocks.
- Indication of the stocks I am purchasing for my personal portfolio.
- Intra-day alerts about interesting insider purchases and trades we are making via a dedicated Twitter account called insideractivity. This is a protected Twitter account and you will have to send us an email to get access to this account.
- A weekly summary email and post called Insider Weekends. This part of the service is free through our sister site SINLetter.com.
- Special Reports published once a quarter that focus on a specific stock or sector and provide more detailed analysis on a high conviction idea. Click here to read a sample of our special reports.
Click here to subscribe and start receiving the insider trade reports.