Market Overview

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).

See also: Sardar Biglari Letter to Shareholders of Cracker Barrel Old Country Store.

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.

See also: Has It Stopped Raining on the Cloud Computing Stocks?

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?

ACTION ITEMS:

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.
Bearish:

Traders may prefer to consider these alternative positions:

  • Carrols Restaurant Group (NASDAQ: TAST) is up almost 62% from the 52-week low.
  • Cabot Oil & Gas (NYSE: COG) is up about 87% from the 52-week low.
  • MI Developments (NYSE: MIM) is up about 40% from the 52-week low.
  • Tyler Technologies (NYSE: TYL) is up more than 61% from the 52-week low.
Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.

Posted-In: cabot oil & gas Carrols Restaurant Group Cracker Barrel Old Country StoreLong Ideas News Short Ideas Insider Trades Trading Ideas

 

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