BlackRock, Cracker Barrel and Other 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. Below are some stocks that have seen insider buying recently.
BlackRock (NYSE: BLK): One director purchased about 300,000 shares of this asset management company in the past week. That was worth almost $60 million. BlackRock reported better-than-expected third-quarter earnings last week, and it has a market capitalization of more than $32 billion. Its long-term EPS growth forecast is more than 12 percent and its forward earnings multiple is less than the industry average price-to-earnings (P/E) ratio. Shares are up more than 12 percent in the past 90 days. The stock has outperformed competitor Legg Mason (NYSE: LM) over the past six months.
See also: BlackRock Sees Better Third Quarter
Cracker Barrel Old Country Store (NASDAQ: CBRL): Sardar Biglari bought 34,000 shares this week. That was worth more than $2.2 million. The Texas-based activist investor has been periodically buying shares since the beginning of the year. Cracker Barrel has a market capitalization of about $1.5 billion. Its return on equity is 31.6 percent and its dividend yield is about 3.1 percent. Shares have pulled back almost four percent in the past week, and the stock has underperformed competitors Denny's (NASDAQ: DENN) and IHOP parent DineEquity (NYSE: DIN) over the past six months.
DaVita (NYSE: DVA): So far this month, Warren Buffett's Berkshire Hathaway (NYSE: BRK-A), a beneficial owner, has purchased almost 350,000 shares, worth more than $38 million, in this Denver -based health care company. Its market cap is about $10.5 billion. Analysts expect DaVita to report strong third-quarter results on October 30. The long-term EPS growth forecast is more than 12 percent. Shares are trading near a multiyear high after rising more than 44 percent year to date. It has outperformed HealthSouth (NYSE: HLS) and the broader markets over the past six months.
See also: DOJ Drops DaVita Inquiry
National Penn Bancshares (NASDAQ: NPBC): A director bought 10,000 shares of this regional bank recently, as he has done in nearly every month so far this year. The most recent batch of shares was worth about $319,000. The bank's market cap is about $1.3 billion and its dividend yield is about 4.2 percent. Shares have pulled back almost 10 percent in the past month, essentially erasing all gains since the beginning of the year. The stock has underperformed the likes of State Street (NYSE: STT) and Susquehanna Bancshares (NASDAQ: SUSQ) over the past six months.
Opko Health (NYSE: OPK): The chairman continues to periodically buy batches of shares, as he has done since last November. He has bought 215,000 shares in the past week, which is worth more than $973,000. This Miami-based health care company has a market cap of near $1.3 billion. Short interest is a hefty 23 percent of the float. Shares have fallen more than five percent in the past few days and are now down about nine percent year to date. Over the past six months, the stock has underperformed competitors such as Allergan (NYSE: AGN).
See also: OPKO Health to Acquire Prost-Data
Investors interested in exchange traded funds focused on insider sentiment might want to consider the following trades.
- Guggenheim Insider Sentiment (NYSE: NFO) is up more than nine percent year to date.
- Direxion All Cap Insider Sentiment Shares (NYSE: KNOW) is up about eight percent year to date.
Traders may prefer to consider these alternative positions to some of the stocks listed above:
- American Capital (NASDAQ: ACAS) is more than 75 percent higher year to date.
- AFC Enterprises (NASDAQ: AFCE) is more than 78 percent higher year to date.
- Acadia Healthcare (NASDAQ: ACHC) is about 113 percent higher year to date.
- M&T Bank (NYSE: MTB) is more than 40 percent higher year to date.
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