The current global macro-economic environment has not been kind to stock market investors. Record-high inflation levels and rising interest rates have resulted in muted returns, making investment decisions harder.
In such a scenario, what can investors do to make profitable investment choices? One strategy can be to pick stocks that company insiders are accumulating.
The TipRanks Insiders’ Hot Stocks tool helps you identify stocks that corporate insiders are buying or selling and their sentiments for these stocks.
The tool uses the C-Level Strategy to bring to you the stocks that can be deemed as profitable picks.
The C-Level Strategy of the Insiders’ Hot Stocks Tool has provided an annualized return of 22.17% based on 3,000 positions. The strategy has an average return per position of 1.68% and the number of stocks with positive returns is 1,676, which is almost 56% of the total number of positions.
Now, let’s have a look at two stocks that the above-mentioned strategy has put forth.
Compass Minerals International, Inc (NYSE: CMP)
Overland Park, KS-based Compass Minerals is a mining company engaged in the production of minerals, including salt, magnesium chloride, sulfate of potash, and other plant nutrition products. The company has a market cap of $1.25 billion.
In its recent second-quarter results, the company reported revenues of $448.5 million, up 5.4% year-over-year. However, adjusted earnings declined 65.3% year-over-year to $0.33 per share.
The stock has a dividend yield of 4.89%, which is above the sector average of 1.45%.
Based on informative transactions by 10 insiders over the past three months, TipRanks’ Insider Trading Activity tool shows that the confidence in CMP is currently Very Positive. Corporate Insiders have bought shares worth $854,000 over this period.
Overall, the stock has a Hold consensus rating based on two Buys, one Hold and one Sell. CMP’s average price target of $53 implies upside potential of 44.9% from current levels. Shares have declined 37.2% over the past year.
Praxis Precision Medicines, Inc. (NASDAQ: PRAX)
Praxis Precision Medicines is a clinical-stage biopharmaceutical company engaged in the treatment of neurological and psychiatric disorders. The company has a market cap of $94.21 million.
According to TipRanks, Insider Confidence Signal is currently Very Positive on PRAX. Further, corporate insiders have bought PRAX shares worth $130,300 over the last three months.
Overall, the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on three Buys and two Holds. PRAX’s average price target of $9 implies that the stock has upside potential of 324.5% from current levels.
Ending Thoughts
Amid an uncertain economic environment, which is showing no signs of recovery, investors can consider the aforementioned stocks that are being lapped up by corporate insiders.
