The insiders are at it again, buying and selling stock in their own companies while they try to leave YOU in the dark.
But we aren’t going to let that happen. We can see what the insiders are doing and whether or not to follow their actions.
Right now I am focused on a diversified communications services company from the technology sector that has recently experienced some pretty hefty insider transactions. The insiders are buying. Should you be doing the same?
I’m not so sure just yet. Here’s why…
The technology company I have my eye on is Comverse, Inc. (CNSI), and one look at their insider transactions will tell you why. Seven CNSI officers and directors purchased over 133,000 shares in their own company earlier this month. The estimated value of those transactions is over $3 million.
So does that mean CNSI is ready to skyrocket and that you should get in on it before it’s too late? Let’s find out.
Here is the weekly chart for CNSI:
Wow! That is one BIG drop in April of this year, isn’t it? Since the beginning of 2014, this stock has given us absolutely no reason to buy it, until recently maybe.
On the bottom of the chart we see the trading volume. Red means selling is higher while black means that buying is higher. The volume at the far right of the chart shows a heavy buying spike in the middle of June. That’s due to the insiders!
We can also see that the stock has responded to all of that buying with an upward reaction. This all begs the question, are the insiders jump starting CNSI on a track leading to huge gains, or is this a futile attempt to trick the public into buying a terrible stock?
Let’s dig a little deeper, shall we?
The next thing I want to look at is what the sector of CNSI is telling us. As I said before, CNSI is in the technology sector…not good! That has been one of the worst sectors over the past six months.
That’s a pretty important mark against CNSI.
Then we can gain some valuable information from checking CNSI’s income statement…
Dating back to July of 2013, CNSI has suffered a decrease in total profit in every single quarter. Uh oh! That is yet another mark against the company.
Although heavy insider buying has caused CNSI to turn upwards in the last month, many important indicators are screaming at us to hold off on this stock. At least for now.
The wonderful thing is that you can keep your eye on CNSI and decide if you want to buy shares later on when all of the indicators tell us it’s a smart move. And you can know WHEN to jump in (the most important part) by following the instructions in the Stock Code Breaker course.
