Any time corporate executive buys their own stock, it’s worth paying attention to.
After all, it shows their confident in the direction of stock.
In fact, according to Peter Lynch, “Insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise”.
Helping, a Harvard Business School study found that stocks with substantial insider buying outperformed the market by an average of 6% annually over a three-year period.
Look at Charter Communications (CHTR), for example.
Charter Communications is a leading broadband connectivity company and cable operator with services available to more than 57 million homes and businesses in 41 states through its Spectrum brand.
Most recently, the stock gapped from about $397.88 to a low of $266.78 on disappointing second-quarter earnings report, which included a significant loss of internet subscribers and a miss on EPS. While revenue of $13.77 billon was in line with estimates, EPS of $9.18 missed by 48 cents per share. Also, second quarter total Internet customers decreased by 117,000.
After such a disastrous pullback, President and CEO Christopher Winfrey bought 3,670 shares for just over $1 million on July 31. Product and Technology President Richard DiGeronimo bought 1,551 shares of CHTR for $657,321.
Sincerely,
Ian Cooper
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