Inside Trading has a bad sound, but what is it really? Company insiders are executives – the presidents and vice presidents, as well as the executives and board members who run the world’s public and private companies. Their positions bring them up to date and make them privy to the insides of their businesses. Using this information to buy up stocks would be sneaky except for two points. First, they publicly trade public stocks. They don’t hide their transactions and the investing public can see what they are doing – and read the notice given. Second, corporate insiders aren’t just trying to make money for themselves. Their positions hold them accountable to their board members, senior executives and the company’s shareholders for making a profit. For investors, this means that insider measures provide valuable information about the soundness of a share. The casual stock player can put together a viable strategy by noting and following the trades of company insiders. TipRanks is tracking these movements and making the data available to the public through the Hot Stocks tool from Insiders. With its current data and a variety of filters, this tool can bring some interesting stock options to light. We’ve selected three “Strong Buy” stocks with recent insider buying that investors should take a closer look at. Raytheon Technologies (RTX) First and foremost is Raytheon, a major research and manufacturing company for the US defense and aerospace industries. This company produces many of the air missiles and radar systems used by the US Air Force for combat aircraft. The military tries to make the contracting process as diverse as possible, but there are only a limited number of companies capable of making quality, modern hardware for the Pentagon – and Raytheon benefits from being part of a small club. A combination of military cutbacks and the ongoing coronavirus crisis depressed Raytheon’s first quarter revenue and both revenue and earnings in the second quarter. However, the company bounced back in the third quarter, when EPS rose 45% to 58 cents. It’s important to note that RTX has consistently outperformed quarterly earnings forecasts for the past two years. In addition to its quarterly earnings, Raytheon announced its dividend payment of 47.5 cents per common share. This is the third quarter in a row with a dividend at this level. The company cut the payment earlier this year to keep it affordable as its share price fell. RTX’s dividend translates into a yield of 3.5%, almost double the industrial goods sector average for peer companies. We have seen two big purchases from insiders in the past few days. Initially, President and CEO Gregory Hayes set $ 3.35 million for a block of 61,406 shares in his company. The second major purchase was by Thomas Kennedy, whose purchase of 19,000 shares cost an estimated $ 999,800. These purchases are a sign of confidence in the company that comes the day after the third quarter results are released. Analyst Michael Eisen, who covered Raytheon for RBC Capital, stated, “We believe the company does well with what is under its control and pays the cost out, synergy and FCF generation …” Looking at that Details and strengths of the company adds Eisen: “… we consider the company’s ledger to be one of the most attractive under cover with a strong focus on the fastest and most supported missile, missile defense, cyber and space systems. “Consistent with his comments, Eisen gives Raytheon an outperform rating (i.e. a buy rating) and his target price of $ 68 suggests the stock is up 22%. (To see Iron’s track record, click here.) Overall, Raytheon’s consensus rating for Strong Buy analysts is unanimous, based on 7 recent buy ratings. The stock is selling for $ 55.61 and the average target price of $ 76.71 implies a year-long move higher of 38%. (See RTX stock analysis on TipRanks) Ares Capital Corporation (ARCC) Next, Ares Capital is an asset management company focused on mid-market business development. Companies like Ares play a vital role in the business world, providing cash, capital, credit, and finance to smaller businesses that may otherwise have difficulty accessing money markets. Ares has more than 350 companies in its investment portfolio, with that portfolio valued at over $ 14 billion. After a sharp drop in sales followed by a drop in earnings per share in the first half of 20, Ares is beginning to bounce back. Revenue increased 49% from $ 333 million in the second quarter to $ 497 million in the third quarter. EPS is unchanged at 39 cents, but exceeded estimates in both the second and third quarters. The outlook for the fourth quarter is another 39 cents. As a sign of the company’s confidence, Ares announced its fourth quarter dividend in late October. The planned payment for the end of December is 40 cents per common share. The dividend has been annualized to $ 1.60 and comes in at an impressive 11.57%, or nearly 6 times the average of S&P listed companies. Ares CEO Kipp Deveer made a big impact on the inside sentiment when he bought 75,000 shares in late October. The deal cost him $ 1.048 million and came just two months after Ares officers and directors made a series of smaller – but also more informative – stock purchases. Insider purchases for ARCC totaled nearly $ 1.9 million in the past three months. Oppenheimer analyst Chris Kotowski points out that ARCC continues to strive to keep its dividend consistently and writes about the company’s value to investors: “We continue to see ARCC as a great holding. The BDC space offers its size, its diversified stocks and its history of maintaining net asset value in difficult times. We see ARCC offer investors the convenience of having a long-established, large BDC with an excellent long-term track record throughout the cycle … ”Kotowski’s target price of $ 16 implies an uptrend of 12% for a year and supports his outperform- Rating (ie buy rating) for the stock. (To see Kotowski’s track record, click here.) It’s not often that all analysts agree on a stock. When this happens, take note of it. ARCC’s Strong Buy consensus rating is based on a unanimous 12 purchases. The stock’s average target price of $ 16.08 is in line with Kotowski’s view. (See ARCC stock analysis on TipRanks) Banc of California (BANC) Last on our list is a full-service commercial bank, one of the largest in the state of California. Headquartered in Santa Ana, the bank focuses on small and medium-sized businesses and has a network of 39 offices, including 31 service branches, spread across the state from San Diego to Santa Barbara. Banc of California has total assets of over $ 7.8 billion. Like much of the banking industry, the 1H20 economic stalemate was bad news for BANC. However, the company has recovered and after negative results in the first and second quarters reported a positive net EPS of 24 cents in the third quarter. This was well above the 14-cent forecast and was firmly in line with the company’s pre-crisis performance. Revenue, which declined in the first quarter, is also back to historical levels at $ 59.8 million in the third quarter. In terms of dividends, the current quarterly payout of 6 cents per common share has been stable for the past 6 quarters. It’s annualized to 24 cents per share and offers a 2% return, almost exactly the average dividend payers on the S&P 500. The key here is the company’s reliability and commitment to payment. On top of the good news, BANC saw its first major insider buy in four months. Last Thursday, October 29, President and CEO Jared Wolff bought 10,000 shares for $ 115,000. Well, Fargo analyst Timur Braziler makes BANC one of his top picks, writing about the stock: “As long as the credit holds and we believe it does, we expect further earnings momentum, TBV growth and discounted valuation relative to the scarcity value offer a lot of additional uptrend … The credit trend is holding up well as the arrears, criticized / classified and distressed balances have improved one by one. “To that end, Braziler rates the stock as overweight (i.e. buy) and sets a target price of $ 15 showing room for 23% growth over the next 12 months. (To see Braziler’s track record, click here.) Overall, Banc of California holds a strong buy from analyst consensus based on 4 reviews including 3 buys and 1 hold. The stock has an average target price of $ 14.17, which translates into upside potential of 16% from the trading price of $ 12.19. (See BANC’s stock analysis at TipRanks.) To find great ideas for trading stocks at attractive valuations, visit TipRanks ‘Best Stocks to Buy, a newly launched tool that brings together all of TipRanks’ stock insights. Disclaimer: The opinions expressed in this article are solely those of the analysts presented. The content is intended to be used for informational purposes only. It is very important that you do your own analysis before making any investment.