Apache, Windstream and Other Stocks Insiders Are Buying
Insiders may sell shares for any number of reasons, but conventional wisdom is that insiders really only buy shares of a company for one reason -- 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.
AGCO (NYSE: AGCO): One director purchased more than 19.2 million shares of this Duluth Georgia-based agricultural equipment maker in the past week. That was worth more than $979 million. The company saw a couple of analyst downgrades in March due to a weaker U.S. agriculture outlook.
AGCO has a market capitalization of about $5 billion and its dividend yield is near 0.8 percent. The return on equity is about 16 percent and the price-to-earnings (P/E) ratio is less than the industry average. Shares have pulled back more than six percent in the past month, but the stock has outperformed competitors CNH Global (NYSE: CNH) and Deere (NYSE: DE) over the past six months.
Apache (NYSE: APA): Two directors bought 13,000 shares in the past two weeks. Altogether, that was worth more than $0.9 million. Furthermore, this oil and gas exploration and production company acquired 14 Gulf of Mexico leases last week.
This Houston-based conglomerate has a market cap of about $29 billion and a dividend yield near 1.1 percent. The P/E ratio is lower than the industry average and the operating margin is greater than the industry average. Shares are down about eight percent year to date and trading near the 52-week low. Over the past six months, the stock has underperformed competitor Anadarko Petroleum (NYSE: APC).
First Niagara Financial (NASDAQ: FNFG): This past week, three directors purchased more than 5,800 shares, worth more than $52,000. Those same three directors also bought 5,700 shares back in December. The CEO of this Buffalo, New York-based bank holding company abruptly departed in March.
The market cap is about $3 billion and the dividend yield is near 3.7 percent. The P/E ratio is greater than the industry average, and the long-term EPS growth forecast is less than eight percent. The share price is up more than six percent year to date. Over the past six months, the stock's performance has been in line with that of peer M&T Bank (NYSE: MTB).
Opko Health (NYSE: OPK): The chairman continues to buy batches of shares periodically, as he has done for more than a year. He scooped up more than 337,000 shares in the past week, at a price of more than $2.4 million. The chief technology officer also bought 5,000 shares.
This Miami-based health care company was a Jim Cramer pick last week, and it has a market cap near $2.3 billion. Short interest is about 18 percent of the float. Shares have retreated more than eight percent from the multiyear high reached in mid-March. The stock has outperformed competitors such as Allergan (NYSE: AGN) over the past six months.
Windstream (NASDAQ: WIN): The chairman, the CEO and two directors recently bought a combined 39,500 shares, which was worth more than $309,000, of this Little Rock, Arkansas-based telecom. About the time of these buys, Windstream was identified as one of the 20 most shorted S&P 500 components.
Windstream has a market cap near $5 billion and a dividend yield of about 12.2 percent. The forward earnings multiple is less than the industry average P/E ratio. But the long-term EPS growth forecast is in the red. The share price rose more than four percent in the past week from near the 52-week low. Over the past six months, the stock has underperformed larger competitors AT&T (NYSE: T) and Verizon Communications (NYSE: VZ).
Investors interested in exchange traded funds focused on insider sentiment might want to consider the following trades.
- Direxion All Cap Insider Sentiment Shares (NYSE: KNOW) is up more than 13 percent year to date.
- Guggenheim Insider Sentiment (NYSE: NFO) is up about seven percent year to date.
Traders may prefer to consider these alternatives to some of the stocks listed above:
- Manitowoc (NYSE: MTW) is more than 10 percent higher year to date.
- Anadarko Petroleum (NYSE: APC) is more than 11 percent higher year to date.
- Columbia Banking System (NASDAQ: COLB) is more than 14 percent higher year to date.
- AT&T (NYSE: T) is more than eight percent higher year to date.
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