Netflix, Akamai 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.
Akamai Technologies (NASDAQ: AKAM): The chief scientist for this content delivery and cloud infrastructure services provider bought up 100,000 shares last week. That was worth more than $3.3 million. The market cap of his Cambridge, Mass.-based company is $6.0 billion. Shares sold off over the recent announcement of the departure of the CEO. But the share price is still up nearly 19% from six months ago. In that time, the stock has underperformed competitors such as Level 3 Communications (NYSE: LVLT) and Limelight Networks (NASDAQ: LLNW).
See also: Akamai Up over 4% After Insider Buying
Basic Energy Services (NYSE: BAS): Two directors recently purchased more than 63,000 shares, worth more than $850,000. This Midland, Tex.-based oil and gas driller has a market cap of $651.9 million and it beat first-quarter revenue estimates but its EPS fell short. It has a PE ratio of 7.3 and a PEG ratio of 0.7. Though the share price is up more than 9% in the past week, year to date it is down more than 23%. Over the past six months, the stock has underperformed competitors such as Tesco (NYSE: TESO) and Gulfmark Offshore (NYSE: GLF), as well as the broader markets.
Life Time Fitness (NYSE: LTM): The chairman purchased almost 17,000 shares of this builder and operator of sports and fitness centers last week. That was worth more than $745,000. First-quarter earnings of this Minnesota-based company were solid, but the guidance did not impress investors, so shares fell. It has a market cap of $2.0 billion and its long-term EPS growth forecast is 16.0%. Shares rose about 3% in the past week and are trading more than 18% higher than a year ago. The stock has outperformed the broader markets in that time.
Netflix (NASDAQ: NFLX): Some 6,000 shares, worth more than $510,000, were purchased last week by a director. The company has a market cap of $4.5 billion. Its long-term EPS growth forecast is 18.4% and its return on equity is 34.4%. But the share price has been falling since the recent Q1 earnings release and is now more than 65% lower than a year ago. Because of the pullback, the stock underperformed competitors such as Amazon.com (NASDAQ: AMZN) and Coinstar (NASDAQ: CSTR), as well as the broader markets, over the past six months
See also: So Much for Netflix's Recovery
Och-Ziff Capital Management (NYSE: OZM): The CEO and an executive managing director recently purchased more than 31,000 shares, worth over $255,000. Shares of the New York-based investment manager have mostly recovered from a pullback following the first-quarter report. It has a dividend yield of 4.5% and a long-term EPS growth forecast of 12.7%. Shares rose more than 8% in the past week but are up less than 6% year to date. The stock has outperformed the likes of Blackstone Group (NYSE: BX) and Citigroup (NYSE: C) 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 bought 275,000 shares, worth more than $1.3 million, in the past week. This Miami-based health care company has a market cap of $1.4 billion. Short interest is 22.4% of the float. Shares have traded mostly between $4.50 and $5.50 since October, and the share price is about 5% lower that at the beginning of the year. Over the past six months, the stock has underperformed competitors such as Allergan (NYSE: AGN) and the broader markets.
Bullish: Investors interested in exchange traded funds focused on insider sentiment might want to consider the following trades:
- Guggenheim Insider Sentiment (NYSE: NFO) is more than 12% higher year to date.
- Direxion All Cap Insider Sentiment Shares (NYSE: KNOW) is more than 11% higher year to date.
Traders may prefer to consider these alternative positions to some of the stocks listed above:
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