Since the U.S. presidential election, many market indexes have dropped about 5%. That is a significant drop in a short time and plenty of stocks are down even more than 5%. Sometimes sudden declines in a stock can be great buying opportunities. In a broad market correction, most stocks will be pressured lower but not every stock deserves to be down. One way to sort through which stocks might be newly created bargains is by following insiders. Company executives and directors tend to know more about the future outlook as well as when the stock is worth buying. The stocks below have recently dropped in value and that appears to be prompting bargain-hunting by some insiders:
Windstream Corporation (NASDAQ:WIN) shares have dropped from over $10 per share to just below $8 in the recent market sell-off. This company offers communications services which include local and long distance, Internet access, data services, and video services. It is focused on providing these services in rural areas which might be too small to service for major communication providers. Windstream is headquartered in Little Rock, Arkansas and provides service in states like Minnesota, Iowa, Pennsylvania, and North Carolina. It has about $6 billion in annual revenues and management recently announced a restructuring with the goal of boosting profits. This is estimated to result in annual savings of about $40 million.
With the stock near 52-week lows, multiple insiders are snapping up shares. On November 13, Dennis Foster, (a director) purchased 8,360 shares in a transaction valued at $69,000. On November 12, Jeffery Gardner (an officer) purchased 12,000 shares in a transaction valued at $99,240. This follows up on other insider buys which occurred in August and June.
Here are some key points for WIN:
- Current share price: $7.90
- The 52 week range is $7.86 to $12.55
- Earnings estimates for 2012: 50 cents per share
- Earnings estimates for 2013: 56 cents per share
- Annual dividend: $1 per share which yields 12.2%
Key Energy Services, Inc. (NYSE:KEG) shares have not performed well in 2012, but that is creating an opportunity to pick up a potential bargain with solid upside. This company provides a range of drilling and maintenance services to the oil and gas industry and it is one of the largest land-based well services company in the country. It operates a fleet of oilfield service vehicles in the United States and it has operations in South America, Russia, and the Middle East. This stock has been hit hard due to a few factors which include a correction in the price of oil which has caused many energy sector stocks to decline. The company has also reported lower earnings, but with the stock trading for about a third of the 52-week high, the shares appear very undervalued. It now trades for about 6 times earnings estimates and well below book value, which is $8.40 per share.
Since the big drop, multiple insiders have been buying. On November 12, Kim Clarke, (an officer) purchased 10,000 shares in a transaction valued at $59,700. On November 8, William Fertig (a director) purchased 10,000 shares in a transaction valued at $58,800. On November 4, William Owens (a director) bought 10,000 shares in a transaction valued at $61,200. Also on November 4, Ralph Michael, (a director) purchased 10,000 shares in a transaction valued at $61,600.
Here are some key points for KEG:
- Current share price: $6.01
- The 52 week range is $5.70 to $18.18
- Earnings estimates for 2012: 67 cents per share
- Earnings estimates for 2013: 53 cents per share
- Annual dividend: none
Data is sourced from Yahoo Finance. No guarantees or representations are made. Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for
informational purposes only. You should always consult a financial advisor.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.