The Best Way to Profit from
Insider Buying

 
 

Many investors think that they can divine stock performance simply by tracking insider sales. It makes sense: Executives and directors running a company have a much better view of what's going on in it than analysts covering their stock. So if they buy shares, then they believe their stock is undervalued, and if they sell off shares, then it must be because they think their stock is too pricey or there are bad things in the company’s future, right? Wrong.

Because Insider transactions have received more and more public attention over the last few years, Insider buying is now often used by company officials as a public relations ploy. When the company is doing badly, company officers will often buy stock to put on a happy face to investors. Further complicating the matter is the large amount of option compensation given corporate executives these days. A good amount of experience, research, and analytical skill is required to see through these false Insider leads and to separate the true Insider created opportunities from the false ones.

But when used correctly, Insider buying has forecasted large advances in industries like coal mining, real estate investment trusts, generic drugs and broadband equipment. Insider buying has also foreshadowed takeovers in specific companies in industries as diverse as power utilities, banking and wireless phone service.

There are many Insider newsletters and services available to the public. Most simply list stocks in which there has been Insider buying; a few add scant, superficial analysis. At Jack Adamo's Insiders Plus, we believe this approach is woefully inadequate. Jack Adamo has based his successful weekly Insiders Plus service around meticulously tracking and decoding Insider buying. And it works: Adamo’s picks have had a compounded annualized gain of 16.7% for the six years Insiders Plus has been published! The S&P 500 gained only 1.7% compounded during the same period.

Just look at some of his recent winners:

  • Devon Energy gained 136.3% in 36 months
  • Companhia Vale do Rio Doce gained 128.7% in 19 months
  • Archstone-Smith Trust - gained 243% in 62 months
  • Aberdeen Australia Equity Fund gained 77% in 28 months
  • Conaco-Phillips gained 91.8% in 33 months
  • Mosaic Company gained 52.3% in 20 months
  • Anadarko Petroleum gained 71% in 28 months
  • BHP Billiton gained 64.4% in 9 months
  • JDSU gained 49.2% in 3 months
  • Goldcorp Inc. gained 28.5% in 3 months

How does Adamo produce these hefty gains from REITs, raw materials, gold and energy plays? He and his research team scrutinize an average of 645 Insider transactions per day filed with the SEC in Washington. The raw data is fed into his proprietary InsideXpert database system where it is corrected, compiled and organized. A preliminary rating is calculated for each stock based on statistically determined criteria highlighting the quantity, quality and timing of insider transactions, and then the rating is reviewed by an analyst experienced in the interpretation of Insider transactions. Jack’s is the only Insider investment service to recognize and expose phony Insider buying. As Jack likes to say, “We use Insider buying as a screen, not an excuse.”

In each weekly issue of Jack Adamo's Insiders Plus, you get:

  • Jack's review of the most important developments in the economy and in the markets, and analysis of their importance to the Insiders PLUS portfolio.
  • Current trends in Insider buying and selling are analyzed at important inflection points.
  • New recommendations are given thorough fundamental and technical analysis, as well as a review of their Insider holdings and transactions.
  • Sectors, such as energy, technology, basic materials, etc., are given special attention as important factors emerge of change.
  • Portfolio updates with current price information and recommended action. Companies with important news are given individual write-ups.
  • 2 FREE Special Reports, "5 Oil Stocks Ready to Soar No Matter What Oil Prices Do" and "4 Insider Gold Buys".
 

         

  Meet our Forbes Guru: Jack Adamo

Insider’s Plus editor Jack Adamo is a CPA who began focusing full time on the stock market in the early eighties while the economy was mired in recession and "stagflation." Despite the prevailing negative environment for equities, he soon saw that he could gain an edge over most pundits by focusing on insider transactions. In 1992, the company that was eventually to become Insiders PLUS was formed for the purpose of tracking and analyzing insider transactions. Now a recognized expert in the field, Jack has been interviewed for National Public Radio, The New York Times and Newsday. His insider insights have appeared in many financial magazines, including Barron’s and he has made many television appearances to discuss insider transactions, accounting issues in stock analysis, and other investment-related topics.

 



 
 

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