Insiders may sell shares for any number of reasons, but conventional wisdom says that insiders really only buy shares of a company for one reason -- they believe the stock price will rise 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.
One director has bought three batches of 60,000 shares so far in August. Combined, that was worth more than $3.0 million. This followed after Aircastle AYR reported better-than-expected second-quarter earnings and announced the appointment of new board members.
The market capitalization is near $1 billion and the long-term earnings per share (EPS) growth forecast is more than 25 percent. Shares of this lessor of commercial jet aircraft have pulled back more than six percent from a recent multiyear high. The stock has outperformed the broader markets over the past six months.
The CEO of Hilltop Holdings HTH and COO of subsidiary PlainsCapital scooped up a combined 74,000 shares earlier this month, after Hilltop missed consensus earnings estimates in its most recent quarterly report. The total price of those purchases was more than $1.1 million.
This Dallas-based insurer and bank holding company has a market cap of more than $1 billion, but the long-term EPS growth forecast is only about three percent. The share price has retreated about eight percent since the beginning of the month. Over the past six months, the stock has outperformed the S&P 500.
Kinder Morgan Management
The chairman and CEO recently bought more than 11,000 shares of Kinder Morgan Management KMR. His purchase was worth about $942,000. The company is a subsidiary of Kinder Morgan KMI and holds interests in Kinder Morgan Energy Partners KMP.
The Houston-based company has a market cap of more than $9 billion. Its the long-term EPS growth forecast is more than 11 percent. The share price is almost five percent lower than a month ago. The stock has underperformed competitor Enterprise Products Partners EPD over the past six months.
Earlier this month, a director purchased 40,000 shares of this conglomerate, which was worth more than $1.0 million. That transaction occurred just after New York-based Leucadia National LUK reported growth of net income and revenue in the first half of 2013.
The market cap is more than $9 billion and the dividend yield is near 0.9 percent. The share price plunged more than 20 percent in June and has yet to fully recover. It is still up more than 12 percent year-to-date. Over the past six months, the stock has underperformed the broader markets.
Mead Johnson Nutrition
One director purchased 10,000 Mead Johnson Nutrition MJN shares on the same day that another director sold 10,000 shares. The total price of the purchase was almost $760,000. These transactions came while a Chinese probe of powdered milk providers for price fixing was in the news.
This leading maker of infant formulas and other nutritional products has a market cap of more than $15 and a dividend yield near 1.7 percent. Shares have traded mostly between $70 and $80 since early this year. Over the past six months, the stock has underperformed larger competitors Danone and Nestle.
One director has scooped up 400,000 Tessera Technologies TSRA shares so far in August, at a total price of more than $7.5 million. At the end of July, the semiconductor packaging and imaging systems company posted a net loss for the second quarter on declining revenues.
The market cap of this San Jose, California-based company is about $1 billion, and its dividend yield is near 2.1 percent. Its return on equity is in the red. Shares have dropped about 15 percent from a recent multiyear high. Despite the pullback, the stock has narrowly outperformed the S&P 500 over the past six months.
At the time of this writing, the author had no position in the mentioned equities.
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