Six companies where CEOs put at least $5 million on the table

CEOs have a lot of reasons to sell stock in their companies. They can do it for tax reasons or to diversify their portfolios. So when they sell some of their holdings, it's not necessarily a reason for concern.
But when they buy, there usually is one bullish reason: They think their stock is headed higher.

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An American Apparel store is seen in New York.

Some strategists say that when you're picking stocks, one factor to look for is a situation where a CEO is buying the company's stock on the open market. After all, if anyone has a good view on the company's outlook, it's the CEO.

In the past six months, there were six U.S. companies where the CEO plunked down $5 million or more on their own stock, according to InsiderScore.com.
They included Opko Health, GEO Group, Continental Resources, Intrexon and Kinder Morgan. As a group, the six are up roughly 8.4% the past six months, slightly behind the 9.6% rise in the S&P 500. Their performance varies widely. The best? Continental Resources, up 35%. The worst was Intrexon, down 29%.

Company	Value of stock CEO bought
Opko Health	$23,598,591
American Apparel	$19,556,256
Kinder Morgan	$12,924,386
Intrexon	$7,270,751
Continental Resources	$5,687,628
GEO Group	$5,337,789

InsiderScore.com

But six months is a short snapshot, and those likely were long-term investments, so it could still turn out that the CEOs' bets on their companies will pay off.

Ben Silverman, director of research at InsiderScore.com, says that while a good starting point, he cautions about putting too much weight on just this. "CEO buying, and all insider buying, is a good excuse to put a stock on the radar," he said in an e-mail. "Do good research though; not all insider buying is created equal. The best situations involve multiple insiders buying."
And his point about insider buying not always being created equal?
The sixth company on the list of $5 million-plus buys: American Apparel. There ousted CEO Dov Charney teamed up with hedge fund Standard General in June to buy shares as part of a power battle for control of the troubled retailer. Charney ultimately resigned from American Apparel's board. He remains a consultant, but is not involved in managing the company he founded. And American Apparel stock still trades for less than $1 a share.