Market Overview

Chesapeake Energy, Weyerhaeuser and Other Stocks Insiders Are Buying (CHK, WY)

Insiders may sell shares for any number of reasons, but conventional wisdom is that insiders really only buy shares of a company for one reason -- they believe the stock price will move higher and they want to profit from it.

Pullbacks and sell-offs provide a perfect opportunity for investors who have faith in a company to snap up shares. Here are some stocks that have seen insider buying recently.

Related: Short interest rises in NVR and Taylor Morrison

Chesapeake Energy

Two directors bought more than 157,000 shares combined in June. That was worth more than $3.1 million. The new CEO of Oklahoma City-based Chesapeake Energy (NYSE: CHK) took up the reins in June, and the company also named a new chief compliance officer.

The market capitalization is more than $13 billion and the long-term earnings per share (EPS) growth forecast is about 52 percent.

Shares of this oil and gas company are up more than 22 percent year-to-date. In that time, the stock has outperformed the likes of Anadarko Petroleum (NYSE: APO) and ConocoPhillips (NYSE: COP).

Newcastle Investment

Two directors recently bought a combined 750,000 shares, which was worth more than $3.7 million, of this real estate investment company. Newcastle Investment (NYSE: NCT) closed a public offering of 35 million shares of common stock at about the same time.

The New York City-based company has a market cap of more than $1 billion. Its dividend yield is about 13.6 percent, and the return on equity is more than 39 percent. The share price is up about 29 percent year-to-date. The stock has outperformed Arbor Realty Trust (NYSE: ABR) and Annaly Capital Management (NYSE: NLY) over that time.

Opko Health

The chairman continues to buy batches of shares periodically, as he has done for more than a year. He scooped up 81,000 Opko Health (NYSE: OPK) shares in the past week in four batches, The total price of those purchases was more than $563,000.

This Miami-based health care company was a Jim Cramer pick in mid-June. It has a market cap of more than $2 billion, and short interest is more than 18 percent of the float. The share price is more than nine percent lower than the multiyear high reached in mid-March. But the stock has outperformed competitors such as Allergan (NYSE: AGN) over the past six months.

Prospect Capital

In June, the CEO, CFO and COO purchased a combined 144,000 shares, which was worth more than $1.5 million. In addition, New York-based Prospect Capital (NASDAQ: PSEC) recently declared four monthly dividends before the end of the year.

The market cap is more than $2 billion and the dividend yield is near 12.6 percent. The share price has mostly recovered from a recent pullback, but it is still down about two percent year-to-date. Over the past six months, the stock has underperformed the broader markets, though it has outperformed Apollo Investment (NASDAQ: AINV).

Weyerhaeuser

One director scooped up 50,000 Weyerhaeuser (NYSE: WY) shares last week, at a price of more than $1.3 million. The forest products company named a new president and CEO in the week before that, as well as priced a public offering of shares.

This real estate investment trust (REIT) has a market cap more than $15 billion and a dividend yield near 2.9 percent. But the long-term EPS growth forecast is only about five percent. Shares have retreated more than 12 percent from a recent 52-week high. Because of the pullback, the stock has underperformed the broader markets over the past six months.

ETFs and Alternatives

Investors interested in exchange traded funds focused on insider sentiment might want to consider the following trades.

 


  • Direxion All Cap Insider Sentiment Shares (NYSE: KNOW) is up more than 11 percent year-to-date.
  • Guggenheim Insider Sentiment (NYSE: NFO) is up about 12 percent year-to-date.

 

Traders may prefer to consider these alternatives to some of the stocks listed above:

 


  • Diamondback Energy (NYSE: FANG) is more than 71 percent higher year-to-date.
  • iStar Financial (NYSE: SFI) is more than 34 percent higher year-to-date.
  • Boston Scientific (NYSE: BSX) is more than 57 percent higher year-to-date.
  • Wisdom Tree Investments (NASDAQ: WETF) is almost 79 percent higher year-to-date.

Posted-In: Allergan anadarko petroleum annaly capital management Apollo InvestmentNews Specialty ETFs Insider Trades ETFs Best of Benzinga

 

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