About a month ago, I told you about a phenomenon that can lead to big returns in January.
I call it “The January Jump.”
Every January, many of the worst-performing stocks of the previous year make large gains at the start of the new year.
Why is that?
Well, large funds often sell stocks that have done poorly during the year, so they do not have to report the holdings the following quarter.
You see, fund managers have to report their holdings at the end of each year.
That means their investors can see what stocks a mutual fund was holding as of Dec. 31.
And the last thing a manager wants is for new investors in the fund to learn they were holding “dogs,” or underperforming stocks.
Adding to that selling are investors looking to harvest those losses to offset capital gains from other profitable investments.
However, new investors (often those seeking value stocks) tend to buy these beaten-down names in early January, which can cause a rapid surge in price.
I have been watching Form 4 insider activity closely over the last six weeks to identify stocks that have suffered large losses in 2021 that insiders are now buying to take advantage of the depressed prices.
And yesterday, I issued five brand new Insider Edge buy alerts on stocks that could all benefit greatly from The January Jump.
Below is one of those recommendations…
Everbridge, Inc.
Everbridge, Inc. (EVBG) is an enterprise software firm developing safety applications for critical event management.
EVBG stock had a fairly uneventful 2021 until three weeks ago when the company’s CEO resigned unexpectedly.
This triggered downgrades by several analysts, and shares fell 49% in a single day.
This appears to be an overreaction by Wall Street.
And insiders are taking advantage…
Four company directors piled into the stock following the news.
Not only is this a cluster buy, but these are also the first insider buys by anyone in the history of Everbridge stock.
The firm went public in 2016, and this is the first time anyone on the inside has bought a single share.
That alone is enough to entice one to piggyback their trades and take a position in EVBG stock.
Embrace the surge,
Ross Givens
Editor, Stock Surge Daily
