Market Overview

General Motors, Annaly Capital And Others Insiders Have Been Buying


With the markets overdue for a correction, and worries about effects the upcoming Federal Reserve interest rate hikes, investors have had to get more selective when it comes to stocks. Insider buying can be an encouraging signal.

Conventional wisdom says that insiders and beneficial owners really only buy shares of a company for one reason -- they believe the stock price will rise and they want to profit from it. And insider buying has picked up as the second-quarter earnings reporting season winds down.

Recently, some of the most significant insider buys have been in Annaly Capital Management, Enterprise Products Partners and GM.

Annaly Capital Management

A director has purchased 300,000 shares of Annaly Capital Management, Inc. (NYSE: NLY) at $10.08 per share. That cost him around $3.0 million. This transaction was in the wake of the second-quarter earnings report and the announcement of a $1 billion share buyback plan.

Annaly manages a portfolio of real estate related investments and its market capitalization is near $9.5 billion. It offers a 12.5 percent dividend yield. However, the operating margin is less than the industry average, and the return on equity is near zero. Shares were changing hands at $10.08 on Friday's close.


A director scooped up 75,000 shares of this London-based insurance and outsourcing company last week. At $100.79 per share, that was worth around $7.56 million, and it boosted his stake to more than 140,000 shares. Aon posted second-quarter results last week that included an earnings beat.

The market cap of Aon Plc (NYSE: AON) is around $28.5 billion, and the dividend yield is about 1.2 percent. The price-to-earnings (P/E) ratio is less than the industry average and the long-term earnings per share (EPS) growth forecast is greater than 11 percent. The share price ended last week at $101.32.

See also: 4 Stocks For Socially Responsible Investors


One director has bought a total of more than 261,000 Colfax Corp (NYSE: CFX) shares ranging between $38.11 and $38.83 apiece so far this month. The total for those transactions came to about $10 million. Colfax recently named a new chief executive officer.

This Maryland-based industrial manufacturing and engineering company has a market cap near $5.0 billion. It offers no dividend. The operating margin is greater than the industry average but the long-term EPS growth forecast is less than 3 percent. Shares ended last week at $14.12, so the buys seem well-timed.

Enterprise Products Partners

The Enterprise Products Partners L.P. (NYSE: EPD) chief financial officer, the chief operating officer and two others together have bought around 117,000 shares to far in August. At prices ranging from $26.25 to $28.07 per share, that came to almost $3.25 million.

This $52.8 million market cap midstream energy company has a dividend yield of about 5.5 percent. Its operating margin is greater than the industry average, but so is its P/E ratio. Shares are down almost 27 percent year to date and ended last week at $26.43. The 52-week low is $18.59.


A director purchased 32,000 shares of General Motors Company (NYSE: GM) at the end of July for $31.84 apiece. That cost him a little more than $1 million, and it followed the release of a stronger-than-expected second-quarter report .

This automaker has a market cap of more than $50 billion and a dividend yield near 4.6 percent. The P/E ratio is less than the industry average and the long-term EPS growth forecast is nearly 21 percent. Note that shares ended Friday's trading session still near the purchase price, at $31.74.

See also: 17 Mutual Funds To Ride The Tech Wave

Valeant Pharmaceuticals

The chief financial officer recently picked up more than 7,800 Valeant Pharmaceuticals Intl Inc (NYSE: VRX) shares in two batches. Prices ranged from $253.99 to $257.25 per share. That totaled about $2 million. Note that the CFO also bought 12,900 shares back in June.

This Canadian company has a market cap near $84.8 billion but does not offer a dividend. While the long-term EPS growth forecast is about 31 percent, the P/E ratio is very high. Shares pulled back about 4 percent last week, and they ended trading on Friday at $247.79, well below the purchase prices.

At the time of this writing, the author had no position in the mentioned equities.

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