Many investors are motivated to sell a stock when they notice that company insiders are dumping their shares. However, company insiders can sell a stock for many reasons, and many of those have nothing to do with the stock’s performance.
On the other hand, heavy insider buying is a solid predictor for when it’s time to buy a stock. That’s because insiders have only one reason to buy a stock. Simply put, they believe their company’s stock is undervalued and are trying to make money just like you are.
To find the stocks for this article, we used the “Stocks with the Most Insider Buying” tool on MarketBeat. This tool, which is available to MarketBeat All-Access subscribers, is an excellent way to jumpstart your stock research by providing a list of stocks with the highest levels of insider buying within the last 90 days.
This Undervalued Oil Stock Looks Ready to Pop
Occidental Petroleum Corporation (NASDAQ: OXY) has been a favorite of MarketBeat analysts over the past month. The price of crude oil, which has been depressed for the better part of a year, recently cracked $80 a barrel. And with demand expected to outstrip supply in the second half of the year, it’s not hard to see oil reaching $90 or even $100 a barrel.
Many investors know that Warren Buffett is a fan of OXY stock and his hedge fund has been buying the stock. That’s been enough to drive the OXY stock price up approximately 9% in the last month. That’s despite the company missing on earnings in its August report.
There are two reasons, however, why Buffett is – and why you perhaps should be – bullish on OXY stock. One is that the company used their windfall profits in 2022 to pay down debt which is cleaning up its balance sheet in favor of shareholders. Plus, Occidental owns about half of the Permian Basin which sets it up for years of inexpensive and high-margin production.
Demand for Public Safety Should be a Catalyst for This Stock
Axon Enterprise, Inc. (NASDAQ: AXON) is a leading provider of technology solutions for law enforcement. The company’s technology enables the use of less lethal weapons, body cameras, and cloud-based software.
No matter your ideology, it’s not hard to make a case that crime and public safety will be a defining issue in the 2024 election. This is particularly true if you live in or around some of the cities that have seen a spike in crime.
That sets up well for Axon which has a mix of hardware and software products that gives the company a wide moat in several of the sectors in which it operates. The company also generates strong free cash flow and has increased its annual recurring revenue ARR by 49%.
With all that said, AXON stock is not for the faint of heart. It has an eye-popping forward P/E ratio of 113.72. Nevertheless, the Axon Enterprise analyst ratings on MarketBeat show that analysts still believe the stock can go higher; a fact that is supported by at least two insider buys in the last 90 days.
You Can Buy the Dip on This Net Lease REIT
Agree Realty Corporation (NYSE: ADC) has seen a surge in insider buying with six insiders purchasing ADC stock in the last 90 days. So what do they know they you may not?
At a time when many investors are rightly concerned about the outlook for commercial lending, it’s important to note that net lease REITs have a business model that helps to shelter them from some of the risks involved in this sector.
Specific to Agree Realty, the company’s RETHINKING RETAIL model focuses on acquiring and developing properties to industry-leading omni-channel retail tenants. Dollar stores, grocery stores, auto parts stores, and drugstores are among the businesses in the company’s portfolio.
Because of their business model, REITs are attractive to income-oriented investors. And Agree Realty is no different. It pays an attractive dividend that currently yields 4.55%. And according to the Agree Realty analyst ratings on MarketBeat, ADC stock has an upside of 18% based on the outlook of eight analysts.
