Wednesday, December 15, 2004

Insider Buying: Case Study - ALOY

On December 13th about thirty minutes before the close, my insider service, SEC Analytics, posted an insider Buy for ALLOY INC (ALOY); the CEO had bought $108K worth of stock on the open market two trading days earlier, on December 9th. At the time of the posting, ALOY was available to buy at the very same price range that the insider had bought his shares, $5.88 - $5.90 a share. Before the close, ALOY was trading above $6.00, to as high as $6.10 on very heavy volume.

The next morning, December 14th, ALOY opened at $5.97 a share and traded strong all day long, trading as high as $6.51 before closing at $6.40. On December 15th, ALOY once again opened strong, at $6.43, trading as high as $6.68 as I write this.

This is typical of a one of the better insider buying trades:

A late afternoon signal that carries into the next day and beyond, for a 10% or better pop. A day-trade on the afternoon of the signal provided the potential of a 4% gain, the days immediately following the signal expanded the potential gain to over 10%.

4 comments:

Greg Reiman said...

Hi Allan:

I spent some time checking out the SEC Analytics web site. I went to the page where their analyst Eric Maurer lists his trades for June thru August. It appears that Eric does allot of trades every day and generally gets out the same day, often for small gains of very small loses. In fact I was surprised at the number of times he exited with a small loss. I assume he uses a tight stop loss discipline. How does your trading experience using insider info from SEC Analylitics compare to Eric's? Eric does appear to have a good track record overall 10-15% per month, except for July where he had about a 7% loss for the month.

Thanks for the closer glimpse inside your trading system. I will add this to my tool box.

I am not sure that I can justify a $150/month subscription to test it out in a small way. Do they ever offer a trial subscription so someone like me with a day job so I can give them a try before committing to a subscription?

Greg

Allan said...

Greg, when I started with SEC_A it was via a free trial, which I am sure they still offer. As for those day-trades listed at the site, don't put a whole lot of emphasis on them, as it represents just one way to trade these insider buys. The information relating to who is buying what and how much can be turned into longer term position trades, not just day-trades. If you don't need real time alerts, there may be a more affordable way to go.

Anonymous said...

Greg,

You can go to www.secanalytics.com and sign up for a free 2 week trial and try the service out. I realize the service is costly, but we will work with you to hopefully help get you a few sucessful trades under your belt. Once you do, you will be able to see how cheap the service actually is!!!!!

Thanks,
Dan (secanalytics user and analyst)

Greg Reiman said...

Hi Dan:

Can you email me at pieks2@earthlink.net ?

I would like to talk to you without posting for the world to read.

Thanks

Greg Reiman