CHICAGO, May 23, 2011 /PRNewswire/ -- The Zacks research team has achieved an analysis breakthrough that detects which insider purchases are most likely to lead to stock price gains.
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Studies at the Universities of Chicago and Michigan had long established that stocks with significant insider buying tend to outperform the market as a whole. Officers, directors, and substantial owners have access to pending contracts and deals, plans and predictions that are not available to the public. This "unfair advantage," is why they are required by law to report significant buys and sells of their own companies' shares within 48 hours.
The question is which insiders, at what companies, buying how many shares, will signal the most significant gains?
Led by stock screening strategist Kevin Matras, the Zacks team probed insider criteria and arrived at sometimes surprising conclusions. For example, the amount of the insiders' purchases was not nearly as important a factor as expected.
The new strategy focuses on selected insider purchase behavior, while screening for companies that already have strong earnings and promising valuations.
Its test results are generating a buzz in the Zacks community. From May 2007 through Q1 2011, the strategy's insider stocks would have tripled the performance of the Zacks #1 Rank Strong Buys, registering an average gain of +41.2% per year.
Notably, even during the heart of the recession in 2008, while the S&P 500 plunged -37%, the Zacks Insider Trader strategy would have scored a gain of +13.6%.
For more details about the Insider Trader strategy, click here: http://at.zacks.com/?id=7652
About Zacks Investment Research
Zacks Investment Research was formed in 1978 by Leonard Zacks. As a Ph.D. from M.I.T., Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter, Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4582.
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Contact Information:
Tim Pendell
Product Manager
Zacks Investment Research
Phone: 312-265-9239
Email: [email protected]
Visit: http://www.zacks.com
SOURCE Zacks Investment Research, Inc.
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