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Will Insiders Be Buying Stocks in 2019?

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On today’s episode of Free Lunch, Ryan McQueeney chats with Zacks Strategist Tracey Ryniec about the Insider Trader portfolio service and the outlook for insider buying of stocks in 2019.

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Free Lunch is presented by Zacks Investment Research. It is streamed live, four times per week, and features breaking news and analysis from Zacks strategists. Free Lunch is available on YouTube, Twitter, and other major streaming platforms.

Ryan and Tracey discuss the basic process of insider buying, including how the information is shared with the public and when during the fiscal calendar executives are allowed to buy shares of the company they work for. Tracey also explains why this action can be a positive indicator because top-level management typically knows more than enough about their business to understand its value.

Moreover, Tracey and Ryan discuss the outlook for insider buying in 2019. Stocks enter the New Year after a historically poor December, but with most of the underlying fundamentals still looking strong, this could mean buying opportunities are aplenty. One way to confirm that would be if insiders start snatching up shares right now.

As Tracey explains, insiders were buying in late November and early December—although we can’t be sure if that activity will remain after the worst of the selling hit later in the month. Unfortunately, insiders are restricted from buying shares in advance of their company’s earnings announcement, so when stocks were really hitting their lows, many executives were already in lockup periods.

Nevertheless, Tracey put the spotlight on energy and banks as two industries that could see strong insider buying after earnings season. We’ve already started to see some indication that this trend will manifest. For instance, the Insider Trader portfolio added Matador Resources (MTDR - Free Report) in December after one of the largest insider trading clusters in recent memory.

So Tracey will head into 2019 with her eyes on more opportunities in oil and finance. But one place she is not expecting to see much insider buying is big tech. Stocks such as Apple (AAPL - Free Report) , Alphabet (GOOGL - Free Report) , and Facebook might look to be trading on the cheap right now, but insiders don’t often go shopping for these. Indeed, big tech executives typically already own so many shares that their stock options go unexecuted.

Want to hear more about how you can profit with Tracey and the Insider Trader portfolio in 2019? Make sure to check out today’s episode of Free Lunch!

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