TipRanks identified the corporate insiders with the best-performing track record and found which stocks they like right now. The search was based on an algorithm used to rank insiders on two factors:
1. Average percentage return per transaction
2. Profitable transaction rate (how often they generated returns on their investments)
TipRanks, a fintech start-up, differentiates between informative and uninformative insider transactions in order to find the best possible trades.
Uninformative transactions indicate that an insider is buying/selling shares for reasons that do not necessarily indicate confidence in the company such as exercising share options. In contrast, informative transactions are deliberately made by insiders, often because they feel the stock is undervalued.
In this case, we looked at stocks across all sectors that exhibit strong buy indicators based on informative transactions of top insiders who are company executives, board members or 10 percent shareholders of publicly traded companies.
Below are three stocks highly ranked corporate insiders are buying.