Sears, Walgreen And Others Insiders Have Been Buying
Sears and Walgreen are among the companies that have seen insider buying recently as the market has become turbulent.
Insiders may sell shares for any number of reasons, but conventional wisdom says that insiders really only buy shares of a company for one reason -- they believe the stock price will rise and they want to profit from it. Pullbacks and sell-offs like those seen recently provide a perfect opportunity for investors who have faith in a company to snap up shares.
Last week, one director picked up a total of about 8,000 Acuity Brands, Inc. (NYSE: AYI) shares at $122.94 apiece, for a total price of more than $980,000. The transaction followed an upgrade of the stock by an analyst who predicted an increase in annual earnings of 20 percent.
The maker of lighting product and systems has a market capitalization of about $5.5 billion and a dividend yield near 0.4 percent. The long-term earnings per share (EPS) growth forecast is about 13 percent, but the return on equity is about 27 percent. The timing of the buy looked good as shares closed at $130.10 on Monday.
One director recently has bought almost 309,000 shares of AGCO Corporation (NYSE: AGCO) at a prices ranging from $42.84 to $45.08, for a total of more than $13.6 million. The company lowered its earnings outlook earlier this month, but this director has been buying batches of shares since late September.
The market cap of this Georgia-based agricultural equipment maker is around $4 billion. The dividend yield is about 1.0 percent. Note that short interest is more than 13 percent of the float. Shares ended Monday trading at $43.40, which is almost 8 percent lower than two weeks ago.
Energy Transfer Equity
An Energy Transfer Equity LP (NYSE: ETE) director acquired more than $60 million worth of shares so far this month. That was around 1.1 million shares of the stock at prices of $49.01 to $53.55. The natural gas company saw an analyst upgrade last week.
The market cap is about $31.4 billion and the dividend yield is near 2.6 percent. Its return on equity is more than 28 percent, but the price-to-earnings (P/E) ratio is sky high. Shares fell more than 23 percent in early October, but they have recovered much of that loss in the past week and closed Monday at $57.69.
The chairman continues to buy batches of shares periodically, as he has done for more than a year. He picked up 104,000 Opko Health Inc. (NYSE: OPK) shares in the past week at an average price of about $8.26. That cost more than $856,000. His total stake is around 143.7 million shares.
This Miami-based health care company has a market cap of about $3.6 billion. Note that the return on equity is in the red, and short interest is more than 23 percent of the float. Shares are trading only marginally lower than at the beginning of the month and ended the trading session Monday at $8.36.
A fund manager has added nearly 107,000 shares of Sears Holding Corp (NASDAQ: SHLD) so far this month for a total of more than $2.7 million. Prices ranged from $25.31 to $29.11. The struggling retailer recently faced reports of vendor troubles and news of a data breach at Kmart.
The market cap of this suburban Chicago company is near $3.7 billion. Both its return on equity and operating margin are in the red. The share price at Monday's close was at $34.96, after a jump of more than 23 percent in the wake of news of a rights offering. It looks like another well-timed buy.
See also: Understanding Stock Market Cycles
A director recently bought a total 1.25 million shares of Walgreen Company (NYSE: WAG) at prices of up to $62.80 apiece. That cumulatively was worth more than $77.3 million. News broke last week that a former Walgreen CFO is suing the company for defamation.
The market cap of this specialty retailer is near $57.6 billion and the dividend yield is about 2.2 percent. Its long-term EPS growth forecast is more than 14 percent, but the P/E ratio is greater than the industry average. At $60.20, the share price is marginally higher than a month ago, but down more than 12 percent from the end of July.
At the time of this writing, the author had no position in the mentioned equities.
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