Esterline, Janus Capital 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.
AGCO (NYSE: AGCO): One director purchased more than 330,000 shares of this agricultural equipment maker in September worth almost $11 million. AGCO recently has been expanding into France, and it has a market capitalization of about $4.6 billion. Its return on equity is about 22 percent and its price-to-earnings (P/E) ratio is less than the industry average. Shares jumped more than 12 percent in the past month, but the stock has underperformed competitors such as Deere (NYSE: DE) and Kubota (NYSE: KUB) over the past six months.
Esterline Technologies (NYSE: ESL): The general counsel and three directors purchased 6,500 shares worth more than $370,000 of this aerospace and defense company last week. The company issued rosy guidance at the end of August. Its market cap is near $1.7 billion and it has a long-term EPS growth forecast of more than 16 percent. But the P/E ratio is higher than the industry average. The share price has fallen more than 21 percent in the past six months. In that time, the stock has underperformed Eaton (NYSE: ETN) and Honeywell International (NYSE: HON).
Janus Capital Group (NYSE: JNS): Beneficial owner Dai-ichi Life Insurance purchased more than four million shares of this asset management company this past week worth more than $39.3 million. Dai-ichi's stake has risen to about 14 percent, or more than 12.5 million shares. Janus Capital's market cap is about $1.7 billion and its dividend yield is about 2.5 percent. The 15.8 P/E ratio is in line with the industry average. Shares are trading near the 52-week high after rising more than 42 percent since the beginning of the year, easily outperforming the S&P 500.
Opko Health (NYSE: OPK): The chairman continues to periodically buy batches of shares, as he has done since last November. He has bought more than 220,000 shares in the past week worth more than $920,000. This Miami-based health care company has a market cap of near $1.2 billion. Short interest is a hefty 22 percent of the float. Shares have fallen more than six percent in the past month and are now down more than 14 percent year to date. Over the past six months, the stock has underperformed competitors such as Allergan (NYSE: AGN).
Republic Services (NYSE: RSG): Last week, beneficial owner Cascade Investment bought more than $1.6 million shares, worth more than $47.6 million, in this Phoenix, Arizona -based waste disposal company. Its market cap is about $10 billion. Analysts expect Republic Services to report declining earnings and revenue in the current quarter. The long-term EPS growth forecast is only 6.6 percent. The stock has pulled back more than three percent in the past two weeks. It has narrowly underperformed competitor Waste Management (NYSE: WM) over the past six months.
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 11 percent year to date.
- Direxion All Cap Insider Sentiment Shares (NYSE: KNOW) is up about nine percent year to date.
Traders may prefer to consider these alternative positions to some of the stocks listed above:
- Terex Corp. (NYSE: TEX) is more than 56 percent higher year to date.
- TransDigm Group (NYSE: TDG) is more than 50 percent higher year to date.
- American Capital (NASDAQ: ACAS) is about 60 percent higher year to date.
- NuVasive (NASDAQ: NUVA) is about 82 percent higher year to date.
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