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Insider Buying Powers Alliant Energy (LNT) to
+50% Gains
Published:
February 25, 2008
Every time a company releases its
quarterly earnings, the firm's managers typically comment on the
latest results and offer guidance on what lies ahead. Of course,
investors like to scrutinize those comments to glean some
insight into the future. However, while it's nice to hear what a
company's top executives are saying, it can be far more
instructive to know what they are doing.
After all, while some managers are more candid than others in
their business assessments, most tend to gloss over any problems
and generally paint things in a positive light. But when
insiders plunk down their own hard-earned money to buy shares in
the company, now that's a true endorsement. Strong insider
buying sends a clear signal that a company's top brass are
bullish about the firm's prospects and believe the shares are
undervalued at current levels.
In many cases, it can be highly profitable to act on that signal
and follow their lead. Not only are a company's directors and
board members privy to information that the public may be
unaware of, but they are also in constant conversation with
suppliers and customers and have a pretty good idea of where the
winds in the industry are blowing. And, of course, these people
know the company's operations inside and out.
With all of this in mind,
High-Yield Investing editor Carla Pasternak went in search of companies with
insider buying in
her April 2005 newsletter -- identifying three of the most
attractive for readers, one of which was Alliant Energy
(NYSE: LNT, $36.10).
Alliant is a provider of electric and natural gas utility
services in the Midwest, serving over a million customers in
several states. As Carla pointed out at the time, the firm had
just cut loose some of its struggling non-regulated business
lines and refocused on its core utility business. It was also
rapidly paying down debt and had plans to add new generating
capacity to spur growth.
Meanwhile, more than a dozen different insiders were busily
scooping up large blocks of Alliant shares. And readers who
joined in have done pretty well. Since Carla's initial
recommendation, the stock has returned nearly +50%, including
the effect of dividend payments.
Given the success of that initial quest, Carla has just launched
a brand new search for stocks with strong insider buying. Using the same methodology that previously
turned up big winners like Alliant, March's newsletter singles
out nearly a dozen promising companies -- all with hefty yields
of 5.5% or higher. Combined, insiders have invested more than
$80 million in these stocks recently.
To see the entire list, we invite you to become a
High-Yield Investing subscriber. Simply
visit
this link to learn more.
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Nathan Slaughter
StreetAuthority Staff Writer
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