Four Stocks the Insiders Are Buying: BAC, CAB, SMG, TWX

December 17, 2010, 08:30 am ET, BY Billy- Contributor| Editor: Thomas H. Kee Jr. (Follow on LinkedIn)

Insider buying is typically viewed as a bullish sign for a stock and there have been several prominent companies that have witnessed the trend in recent days. Although these purchases may not always lead to sudden rallies, they usually do serve as positive indicators. With that being said, here are four stocks the insiders are buying right now.

Straight to the Bank

On Friday, a director for Bank of America (NYSE: BAC) purchased 5,000 BAC shares at a price of $12.79 per share. This same director, Donald Powell, also bought 5,000 shares of the company’s stock for $11.30 per share on December 1. Maybe the bottom is already in for this stock, but BAC shares have been facing choppy waters ever since the 50-day moving average broke below the 200-day moving average in late June.

Excluding a goodwill impairment charge, Bank of America posted net income of $0.27 per share in Q3 versus a loss of $0.26 per share in the prior year quarter. The company has been the beneficiary of both lower credit costs and higher net interest income. Shares of Bank of America are down 17.7% on the year.

A stock that is on the up and up and has also seen insider buying in recent days is the specialty retailer Cabela’s (NYSE: CAB). On Thursday, a director for the company picked up just under $470,000 worth of common stock at a price of $22.78 per share. On Monday this stock set a new 52-week high and CAB shares are up 58.6% year-to-date.

Sold on Solar

There have been multiple insider purchases of The Scotts Miracle-Gro Company (NYSE: SMG) during the past week. Among them was a purchase of more than $500,000 of SMG shares by a director at prices ranging between $50.50 and $50.65 per share. 

The lawn and garden care company is coming off of a record fiscal year 2010 in which income from continuing operations jumped 34% over the previous year. Better gross margins and cost reductions both played a role in this improvement. SMG shares are up 29.4% so far this year.

One other stock that has seen some insider buying recently is the media company Time Warner (NYSE: TWX). Last Wednesday, a director for the company purchased a little more than $100,000 worth of Time Warner shares at a purchase price of $31.42 per share. TWX shares have risen 8.0% year to date.

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