Stocks to Buy Now: Two Companies with Strong Insider Buying

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Tracking insider buying and selling activity has been proven to be a very effective method of finding good stocks to buy.

Insiders usually buy when the stock price is down, since they are usually long-term investors by nature and are fond of bargain prices.

When they are buying into shares on the rise – especially when they're hitting 52-week highs – it demonstrates a high amount of confidence in the direction of the company they oversee and operate.

All insider activity is filed with the U.S. Securities and Exchange Commission, so interested investors can easily find out which stocks insiders love – and which ones they're dumping.

Tracking activity can be done using a stock screener like finviz.com, that lists the stock, the buyer's name, relationship to the company, date of sale, number of shares and total value.

A couple weeks ago we noted that Walter Energy Inc. (NYSE: WLT), Key Energy Services Inc. (NYSE: KEG) and JPMorgan Chase & Co. (NYSE: JPM) all showed signs of high insider buying this year.

This week we have a couple more stocks hitting our radar with high insider buying, making good stocks to buy now if you like to invest where the key officers put their money. Take a look.

Stocks to Buy Now that Insiders Love

Both of the following companies are going to be major beneficiaries of the nascent housing recovery. If insiders are right, these stocks will likely see explosive growth in revenues and earnings that could take the stock to multiples of the current stock price.

Investors who also believe in the lasting nature of a housing recovery should play "follow the leader" and add these companies to their long-term portfolio.

One company that is near new highs and seeing strong insider buying is Home Loan Servicing Corp. (Nasdaq: HLSS).

The company acquires mortgage servicing assets such as mortgage service advances and servicing rights. The Cayman Islands-based company buys mortgage servicing rights primarily from Ocwen Financial Corp. (NYSE: OCN). The rights are paid monthly and include fees for establishing and maintaining escrow accounts for insurance and taxes as well as forwarding interest and principle payments to the mortgage holder. The assets that the company buys tend to have very little credit and price risk and have been paying off huge for Home Loan Services Solutions.

As revenue and earnings have spiked higher, insiders have been aggressively buying the shares in the open market, like these recent purchases…

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