The world of insider trading is full of noise. While everyone loves a good insider buying story, the truth is, most of these trades are meaningless. Large institutional buys can often appear as insider purchases, while option exercises and stock grants rarely offer valuable insights.
However, there’s one group of insiders who consistently deliver winning trades: C-suite executives, particularly CFOs. These individuals are deeply involved in a company’s strategic decisions, daily operations, and financial health. Their knowledge of the company’s inner workings gives them a significant information advantage, making their stock purchases worth paying attention to.
Why are CFOs the best insider indicators? They live and breathe the numbers, understanding how every decision impacts a company’s profits and financial condition. History has shown that CFOs consistently earn high returns when they invest in their own company’s stock.
This week, we’re highlighting two CFO-backed stocks that have flown under the radar of mainstream media and most of Wall Street:
Epsilon Energy (EPSN):
CFO Andrew Williams has been making six-figure open-market purchases of EPSN stock. While the company may face a near-term earnings disappointment due to low oil and gas levels, the long-term potential is significant. Increased natural gas demand over the coming years is poised to drive substantial profits for Epsilon. The CFO’s recent financial modeling, which aligns with our own analysis, indicates that rising natural gas prices will have a dramatic impact on Epsilon’s bottom line, leading to a much higher stock price in the future. Epsilon also offers a generous dividend, currently yielding over 4%, further enhancing its investment appeal.Relmada Therapeutics Inc. (RLMD):
Relmada is developing new drugs to treat central nervous system diseases and is researching the potential of low-dose psilocybin for metabolic disorders. While the drug approval process is complex and unpredictable, CFO Maged Shenouda has been making consistent six-figure purchases of RLMD stock throughout the year. He’s not the only one buying – CEO Sergio is also making significant open-market purchases. Adding to the bullish sentiment, Jefferies, a brokerage and research firm, recently upgraded RLMD to a buy, citing the strong potential of the company’s drug in Phase 3 trials.Both Epsilon Energy (EPSN) and Relmada Therapeutics (RLMD) are currently flying under the radar of most investors. However, with CFOs placing significant bets on their own companies’ futures, these stocks deserve a closer look. The potential for significant returns, even several times the current stock price, makes these two companies compelling investment opportunities.
