Legendary investor Peter Lynch was fond of saying that corporate insiders may sell their company’s shares for a variety of reasons. But there’s only one reason they buy – and that’s because they think the price is going up.
Anyone at the director-level or above in Corporate America is considered an “insider” – and it’s perfectly legal for them to buy their own company’s stock. That’s a good sign in general, and especially for the stocks that we’re interested in. It means the executive buyer is bullish on dividend growth, and as we’ve discussed before, payout growth is what ultimately sends stock prices higher.
Executive teams from two of our Contrarian Income Report companies are, right now, using personal money to buy up their own cheap stocks and big dividends. That’s a big sign of confidence, and I’ll share the specifics in a minute. But first, let’s talk about a few more big payouts being bought by corporate insiders.
Seven 7% Dividends With Serious Insider Buying
Five insiders at Ares Capital (ARCC) have accumulated more than 150,000 shares for personal accounts over the last 3 months. These executives like their stock at 88 cents on the dollar. ARCC trades for just 88% of book value today, a bargain level it hasn’t yet seen this decade.
