While insider action can provide valuable hints about where a stock is headed, many investors consider this activity most helpful with buying decisions. After all, as legendary fund manager Peter Lynch once noted, insiders might sell their firm’s stock for any number of reasons. But they only buy it for one reason: they think it’s going to go up. And who better to make such a call than the people most closely associated with a company? Trouble is, keeping abreast of insider buying trends in such a large universe of stocks is much too time-consuming for most individual investors. But… Read More
While insider action can provide valuable hints about where a stock is headed, many investors consider this activity most helpful with buying decisions. After all, as legendary fund manager Peter Lynch once noted, insiders might sell their firm’s stock for any number of reasons. But they only buy it for one reason: they think it’s going to go up. And who better to make such a call than the people most closely associated with a company? Trouble is, keeping abreast of insider buying trends in such a large universe of stocks is much too time-consuming for most individual investors. But no matter. There’s a simpler way to own stocks with heavy insider buying, and recent performance suggests it’s capable of generating market-beating returns. The method: investing in exchange-traded funds designed specifically to offer broad exposure to stocks with robust insider buying. Currently, there are two choices, the Guggenheim Insider Sentiment ETF (NYSE: NFO) and the Direxion All Cap Insider Sentiment ETF (NYSE: KNOW). Both are index funds (with reasonable expense ratios of less than 70 basis points). NFO tracks the Sabrient Insider Sentiment Index, an equal-weight benchmark of the 100 stocks with the highest composite rankings incorporating four factors: the… Read More