Adobe, Darden 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. Here are some stocks that have seen insider buying recently.
Adobe Systems (NASDAQ: ADBE): One director purchased 5,000 shares of this diversified software company in the past week, worth more than $190,000. Last week, Adobe pulled back after hitting a 52-week high, and it was a Zack's Bear of the Day. It has a market capitalization of about $18.8 billion. Its price-to-earnings (P/E) ratio is less than the industry average and the long-term earnings per share (EPS) growth forecast is almost 12 percent. Shares are up about 19 percent from six months ago, and the stock has outperformed Microsoft (NASDAQ: MSFT) and Oracle (NASDAQ: ORCL) in that time.
Darden Restaurants (NYSE: DRI): This past week, a director purchased 11,000 shares, worth more than $494,000. The market cap of this operator of the Red Lobster, Olive Garden and other chains is about $5.9 billion, and its dividend yield is about 4.4 percent. The long-term EPS growth forecast is about 11 percent, and the return on equity is more than 25 percent. Shares have dropped more than 15 percent in the past 90 days and are less than two percent lower than a year ago. The stock has underperformed Brinker International (NYSE: EAT) and 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 more than 409,000 shares, worth almost $87 million, in this Denver -based health care company. Its market cap is about $10.8 billion. The long-term EPS growth forecast is about 13 percent and the return on equity is more than 23 percent. The share price is once again approaching the multiyear high hit in November, boosted by recent news of the company's expansion. DaVita has outperformed competitor HealthSouth (NYSE: HLS) over the past six months.
NuStar Energy (NYSE: NS): A director recently bought 3,000 shares, which was worth more than $127,000. This San Antonio-based company stores and transports petroleum products worldwide, but it recently sold a refinery in its hometown. It has a market cap near $4.0 billion and a distribution yield of more than eight percent. But the long-term EPS growth forecast is only about six percent, and the return on equity is in the red. The stock has been on a roller coaster, plunging more than 17 percent in November and surging more than 14 percent in January. Over the past six months, the stock has underperformed the likes of Plains All American Pipeline (NYSE: PAA).
Opko Health (NYSE: OPK): The chairman continues to periodically buy batches of shares, as he has done for more than a year. He bought 276,000 shares so far this month, which is worth more than $1.45 million. This Miami-based health care company has a market cap near $1.8 billion. Short interest is a hefty 22 percent of the float. Shares have jumped about 21 percent year to date, partly on news of recent acquisitions and an expanded collaboration. Because of the spike to a new 52-week high, the stock has outperformed competitors such as Allergan (NYSE: AGN) over the past six months.
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