5 Stocks With Big Insider Buying

Posted: Oct 27, 2009 15:44 PM by Aryeh Katz
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Tickers in this Article: ADPT, MCI, TIXC, SWY, PKO

Most of the pros will tell you that heavy insider buying can be a cue to look more closely at a stock. The same, however, cannot be said about insider selling. There are countless reasons why an insider might sell his shares, everything from a house purchase to a tax liability to college tuition for his children. Insider buying, on the other hand, is hard to do with anything but investment purposes in mind.

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Below, we focus on five stocks that have seen very recent (and sizeable) insider purchases, along with some key fundamentals driving their performance of late.

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Investment Manager Shows Confidence 
PIMCO Income Opportunity Fund (NYSE:PKO) is a closed end investment fund that invests primarily in global debt securities. One of its portfolio managers, Daniel Ivascyn, purchased over 75,000 shares of the fund's stock (worth in excess of $1.5 million) between September 8 and October 19.  

The fund is up 75% since hitting a 52-week low back in March of this year, but Ivascyn apparently believes the fun has just begun. Current investors will also be privy to a dividend yield of 10%, paid in monthly distributions.

Safeway Inc. (NYSE:SWY) is a $9.3 billion company by market cap, offers a nominal yield of 1.8% annually and trades with a P/E of 10.4x last year's earnings. On October 20, 2009, director Michael Shannon bought 6200 shares of the company for roughly $143,000.

Safeway is a food and drug retailer with over 1700 stores from Mexico north into Canada.  

Who's Got Tickets? 
Tix Corp. (Nasdaq:TIXC) provides promotion, merchandising and ticketing services for live events. Iqbal Ashraf, a 10% owner of the company, went on an uproarious buying spree between September 1 and October 21, purchasing over $4 million worth of shares in 30 separate trades.

MassMutual Corporate Investors (NYSE:MCI) is a closed end fund that invests in private placements and other securities that are not publicly tradable. Three separate insiders in the last two months have collectively purchased 5000 shares for a total investment of approximately $120,000.

The stock has a market cap of nearly $230 million and yields 8.7% annually.

Adaptec Inc. (Nasdaq:ADPT) is essentially a data storage operation, providing hardware and software to aid clients manage and protect critical documents. Between August 11 and October 19, Steel Partners II LP, a 10% owner of the company, purchased slightly over $4.5 million worth of the company's shares.

Adaptec trades at below book value (P/B is 0.9).  

The Wrap
Insider buys can be a great tipoff that a stock is about to move. The above mentioned issues have all had significant insider activity in the last few days and weeks. Savvy investors will take note. (To learn more, check out Delving Into Insider Investments.)

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