One of my favorite ways to look into stocks to buy now is to check out what the insiders are getting into.
Insider buying and selling of the shares of the companies they control has often been a way to get excess profits in your portfolio.
Insiders can often be early as they are buying on anticipation of an improvement in business conditions and not necessarily market movements but they are often correct.
Insiders aren't buying stocks for short-term profits, they have long-term plans. Insiders buy with a long timeframe in mind, but they are also looking for huge returns over that time.
Investors interested in the same outcome should pay attention when insiders act.
Recently, there have been several insider buys worthy of attention for individual investors looking for stocks to buy.
Three of the Best "Insider Buying" Stocks to Buy Now
HK is down 35% over the past year, but at around $6 a share it looks like it has bottomed. There is a lot of insider and smart money betting that this stock rebounds and rewards investors with huge returns over the next couple of years.
The company operates in the Bakken oil field with locations in Montana and North Dakota; the Eagle Ford in Texas and the Utica/Point Pleasant Field in Pennsylvania.
About 82% of the company's production right now is oil and just 13% is the cheaper natural gas. The remaining 5% is natural gas liquids such as propane, butane and ethane.
The company has adopted a "drill baby drill" approach in spite of lower gas prices. Production rose more than 500% year over year in the first quarter of 2013 from the year before. Halcon has drilled dozens of new wells in the past year and is drilling more as we speak.
The company's bad side includes a large debt load, but Halcon is selling all assets considered non-essential to pay that down.
To some degree this company is a highly leveraged turnaround situation – one where insiders have a high degree of conviction that Halcon will succeed.
CFO Mark Mize recently opened his checkbook to pick up an additional 15,000 shares of the company. Charles Cusack, the Chief Operating Officer, purchased 20,000 shares last month.
They are not the only ones buying as the Canada Pension Plan Investment Fund just bought over $10 million worth of stock and legendary oil man T. Boone Pickens has also been buying.
About the Author
Tim Melvin is an unlikely investment expert by any measure. Raised in the "projects" of Baltimore by a single mother, he never attended college and started out as a door-to-door vacuum salesman. But he knew the real money was in the stock market, so he set sights on investing - and by sheer force of determination, he eventually became a financial advisor to millionaires. Today, after 30 years of managing money for some of the wealthiest people in the world, he draws on his experience to help investors find "unreasonably good" bargain stocks, multiply profits, and build their nest eggs. Tim tirelessly works to find overlooked "hidden gems" in the stock market, drawing on the research of legendary investors like Benjamin Graham, Walter Schloss, and Marty Whitman. He has written and lectured extensively on the markets, with work appearing on Benzinga, Real Money, Daily Speculations, and more. He has published several books in the "Little Book of" Investment Series and a "Junior Chamber Course" geared towards young adults that teaches Graham's principles and techniques to a new generation of investors. Today, he serves as the Special Situations Strategist at Money Morning and the editor of "Max Wealth" and Heatseekers.