Market Overview

Medtronic, Snyder's-Lance and Other Stocks Insiders Are Buying

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Insiders may buy shares of a company because they believe its stock price will move higher and want to profit from this anticipated rise. Sell-offs might provide an opportunity for insiders who have faith in a company to snatch up shares. Below are some stocks that have recently seen insider buying.

Cyberonics (NASDAQ: CYBX): A vice president and a director recently purchased a combined 50,000 shares, worth more than $1.6 million. Last week, Jim Cramer recommended buying shares of this Houston-based medical device maker. It has a return on equity of 20.1%, long-term earnings per share (EPS) share forecast of 28.3%, and operating margin higher than industry average. Shares have pulled back a bit from a recent 52-week high but are still trading more than 30% higher year to date. The stock has outperformed Medtronic (see below) and the broader markets over the past six months.

Medtronic (NYSE: MDT): A director for this Minneapolis-based medical device maker purchased more than 5,000 shares last week. That purchase was worth over $197,000. The market capitalization of this S&P 500 component is around $38 billion. Also last week, the company boosted its dividend by 7.2%. The firm's return on equity is 20.6% and its price-to-earnings (PE) ratio is less than the industry average. Shares have traded mostly between $36 and $40 since December. Over the past six months, the stock has underperformed competitors Boston Scientific (NYSE: BSX) and St. Jude Medical (NYSE: STJ).

See also: Supreme Court Decision Looms; How to Trade the Obamacare Ruling

EXCO Resources (NYSE: XCO): Activist investor Wilbur L. Ross Jr. has purchased about 3.9 million shares in June. These purchases were worth more than $26 million. Analysts expect this Dallas-based independent oil and natural gas company to post a penny per share loss for the second quarter. This expected penny loss per share is the same as the actual loss per share reported for the company's first quarter. EXCO has a market cap above $1 billion and a short interest around 16.5% of the float. Though EXCO's share price is up slightly over the previous seven days, year to date it is more than 30% lower. The stock has underperformed competitors such as SandRidge Energy (NYSE: SD) and Encana (NYSE: ECA), as well as the broader markets, since the beginning of the year.

Opko Health (NYSE: OPK): The chairman continues to periodically buy batches of shares, as he has done since last November. He bought 100,000 shares, worth more than $480,000, in the past week. This Miami-based health care company has a market cap of above $1 billion. Short interest is a hefty 23.3% of the float. Shares have traded mostly between $4.40 and $5.40 since November. At Monday's close, Opko's share price was more than 6% lower year to date. Over the past six months, the stock has underperformed competitors such as Allergan (NYSE: AGN) and the broader markets.

See also: The Opko Health Battle: High Short Interest with Heavy Insider Buying

Snyder's-Lance (NASDAQ: LNCE): The chairman of the board has purchased more than 57,000 shares of this Hanover, Pennsylvania-based snack-food maker in June. That purchase was worth more than $1.4 million. Earlier this month, the company announced the acquisition of a Georgia-based snack-food distributor. Snyder's-Lance has a market cap of about $1.6 billion and a long-term EPS growth forecast close to 14.0%. As of Monday's close, shares had pulled back about 9% from a multiyear high in May. The stock has outperformed Kraft Foods (NYSE: KFT) and PepsiCo (NYSE: PEP) over the past six months.

See also: Snyder's-Lance Acquires O'Byrne Distributing; Terms Not Disclosed

United Therapeutics (NASDAQ: UTHR): Some 34,000 shares, worth more than $1.5 million, were purchased in June by the chief executive of this Maryland-based biotechnology company. The company has a market cap near $2.5 billion. Analysts predict that this company will report an approximate 16% rise in revenues for both the current quarter and the full year. The return on equity is 27.2%. The share price jumped about 9% in mid-June but has faced resistance near $48 in the past week. Over the past six months, shares of United Therapeutic have underperformed shares of competitors, such as Allergan and Gilead Sciences (NASDAQ: GLD), as well as the broader markets.

See also: United Therapeutics: Meeting Unmet Clinical Needs

ACTION ITEMS:

Bullish:

Investors interested in exchange traded funds focused on insider sentiment might want to consider the following trades. As of Monday's close, both were essentially flat year to date.

  • Guggenheim Insider Sentiment (NYSE: NFO)
  • Direxion All Cap Insider Sentiment Shares (NYSE: KNOW)
Bearish:

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

  • NuVasive (NASDAQ: NUVA) is up more than 80% year to date.
  • Edwards Lifesciences (NYSE: EW) is up more than 40% year to date.
  • Cobalt International Energy (NYSE: CIE) is up more than 30% year to date.
  • Flowers Foods (NYSE: FLO) is up more than 20% year to date.
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: Allergan boston scientific Cobalt International Energy cyberonics Edwards Lifesciences encana Exco Resources flowers foods Gilead Sciences Insider Buying insider sentiment ETFs Kraft Foods Medtronic NuVasive Opko Health pepsico SandRidge Energy Snyder's-Lance st. jude medical united therapeuticsLong Ideas News Specialty ETFs Insider Trades Intraday Update Trading Ideas ETFs Best of Benzinga

 

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