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Actionable news in CHK: CHESAPEAKE ENERGY Corp,

Insiders Giving Strong Vote of Confidence to Chesapeake Energy (CHK) And These 2 Companies

No one can deny that corporate executives and directors generally have more knowledge and insight about their companies’ future prospects and developments than anyone else. While they are not allowed to trade on material non-public information, they do have their own perception about the current state of the industry their companies are operating in and the potential of their companies. Corporate insiders are well-informed about the cyclical trends, order flow, production bottlenecks, and a wide array of other factors that influence their companies’ businesses, so their insider trades may offer useful information for individual investors. Extensive research has provided evidence that insider purchases tend to outperform the broader market, which is the primary reason why Insider Monkey tracks this type of activity. Having said that, the following article will discuss the noteworthy insider buying activity registered at three companies recently, and their performance over the past several months.

Decline In Crude Oil Prices Zach Schreiber

Most investors can’t outperform the stock market by individually picking stocks because stock returns aren’t evenly distributed. A randomly picked stock has only a 35%-to-45% chance (depending on the investment horizon) to outperform the market. There are a few exceptions, one of which is when it comes to purchases made by corporate insiders. Academic research has shown that certain insider purchases historically outperformed the market by an average of seven percentage points per year. This effect is more pronounced in small-cap stocks. Another exception is the small-cap stock picks of hedge funds. Our research has shown that the 15 most popular small-cap stocks among hedge funds outperformed the market by nearly a percentage point per month between 1999 and 2012. We have been forward testing the performance of these stock picks since the end of August 2012 and they have returned 102% over the ensuing 38 months, outperforming the S&P 500 Index by more than 53 percentage points (read more details here). The trick is focusing only...


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