Six Stocks Insiders Are Buying
Insiders may sell shares for any number of reasons, but there is really only one reason insiders buy shares of a company -- 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.
Cracker Barrel Old Country Store (NASDAQ: CBRL): This retailer and restaurateur recently had more than 7 million shares, worth over $35.1 million, purchased by a Sardar Biglari's Lion Fund, a so-called beneficial owner. Cracker Barrel has a market cap of $1.2 billion, a dividend yield of 1.2% and a return on equity of 32.9%. The share price is up about 26% in the past three months and once again nearing the 52-week high. In that time, the stock has outperformed the Nasdaq and competitors such as Denny's (NASDAQ: DENN) and DineEquity (NYSE: DIN).
EXCO Resources (NYSE: XCO): Since just before Christmas, WL Ross & Co. has purchased almost 20 million shares, worth more than $18.8 million. Wilbur Ross's firm bought shares throughout the fall as well. EXCO is an independent oil and natural gas company with a market cap of $1.9 billion. The P/E ratio is less than the industry average and the long-term EPS growth forecast is 21.7%. Shares are trading at a 52-week low after falling more than 42% in the past six months. The stock has underperformed the broader markets in that time.
Spectrum Brands (NYSE: SPB): Harbinger Group (NYSE: HRG), its parent, recently purchased more than 38,000 shares, worth more than $1.0 million, of this global branded consumer products company. Spectrum Brands has a market cap of $1.5 billion. The stock is up more than 16% from three months ago and trading above its 50-day and 200 day moving averages. Over the past six months, the stock has outperformed Harbinger but underperformed competitors Energizer (NYSE: ENR) and Procter & Gamble (NYSE: PG), as well as the broader markets.
Tejon Ranch (NYSE: TRC): Beneficial owner Towerview purchased 490,000 shares, worth more than $11.7 million last week. Towerview has been periodically buying shares since October. Real Estate developer Tejon Ranch has a market cap of $510.9 million and a long-range EPS growth forecast of 15.0%. It just announced that Dollar General (NYSE: DG) would be leasing warehouse space. Tejon shares have traded mostly between $23 and $26 since September. The stock has underperformed the broader markets over the past six months.
VMware (NYSE: VMW): This tech company's parent, EMC Corp. (NYSE: EMC), has purchased more than 480,000 shares so far in January. That was worth more than $39.7 million, and is in addition to more than $24.0 million's worth bought in December. The market cap of VMware is $36.0 billion and its long-term EPS growth forecast is 26.1%. But the P/E ratio is above the industry average. Shares are up more than 18% from the 52-week low but still are about 8% lower than a year ago. Over the past six months, the stock has underperformed the broader markets but outperformed EMC.
Universal Display (NASDAQ: PANL): Some 90,000 shares, worth more than $2.9 million, were purchased last week by Discovery Capital Management. The beneficial owner also bought more than 600,000 shares in November. Universal Display is a developer of organic light emitting diode technologies and has a market cap of $1.8 billion. Its long-term EPS growth forecast is 24.5%. The share price popped more than 27% this past week, but is still more than 34% lower than the 52-week high. Over the past six months, this stock also outperformed the Nasdaq and competitor Eastman Kodak (NYSE: EK).
See also: How Can Insider Trading Help You?
Bullish: Investors interested in exchange traded funds focused on insider trades might want to consider the following:
- Guggenheim Insider Sentiment (NYSE: NFO) is about 27% higher than the 52-week low.
- Direxion All Cap Insider Sentiment Shares (NYSE: KNOW) is more than 12% higher than the 52-week low.
- Direxion Large Cap Insider Sentiment Shares (NYSE: INSD) is more than 9% higher than the 52-week low.
Traders may prefer to consider these alternative positions:
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