5 Stocks With Recent Intensive Insider Buying

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Includes: GLUU, HTA, MBLX, NTLS, WMC
by: Markus Aarnio

When insiders accumulate a stock intensively, the stock can be expected to outperform the market during the next six months. Insiders tend to buy more often than usual before large price increases and to sell more than usual before price decreases.

Intensive insider buying can be defined by the following three criteria:

  1. The stock is purchased by three or more insiders within one month.
  2. The stock is sold by no insiders in the month of intensive purchasing.
  3. At least two purchasers increase their holdings by more than 10 percent.

In this article I will feature five stocks that met these three criteria of intensive insider buying during the last 30 days.

1. Healthcare Trust of America (NYSE:HTA), a publicly traded real estate investment trust, is a owner of medical office buildings.

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Insider buys

  • Amanda Houghton purchased 1,000 shares on December 11 and currently holds 39,057 shares of the company. Amanda Houghton has served as the company's Executive Vice President - Asset Management since December 2011.
  • Maurice Dewald purchased 12,000 shares on November 16 - December 6 and currently holds 49,500 shares of the company. Mr. DeWald has served as an independent director of the company since September 2006.
  • Mark Engstrom purchased 2,500 shares on December 10 and currently holds 139,510 shares of the company. Mark Engstrom has served as the company's Executive Vice President - Acquisitions since July 2009.
  • Warren Fix purchased 2,000 shares on December 7 and currently holds 68,229 shares of the company. Warren Fix has served as an independent director of the company since September 2006.
  • Bradley Blair purchased 25,000 shares on December 6-7 and currently holds 62,500 shares of the company. Bradley Blair has served as an independent director of our company since September 2006
  • Scott Peters purchased 10,000 shares on December 7 and currently holds 530,000 shares of the company. Mr. Peters has served as Chairman of the Board since July 2006, Chief Executive Officer since April 2006 and President since June 2007.
  • Kellie Pruitt purchased 5,000 shares on December 7 and currently holds 128,464 shares of the company. Ms. Pruitt has served as Chief Financial Officer since May 2010, Treasurer since April 2009, and as Secretary since July 2009.
  • Larry Mathis purchased 25,000 shares on December 6-7 and currently holds 68,024 shares of the company. Mr. Mathis has served as an independent director of the company since April 2007.
  • Gary Wescombe purchased 20,000 shares on December 6 and currently holds 87,500 shares of the company. Gary Wescombe has served as an independent director of the company since October 2006.

Financials

The company reported the third-quarter financial results on November 7 with the following highlights:

Revenue $78.1 million
Funds From Operations [FFO] $26.5 million
Cash $8.3 million
Debt $1.0 billion
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Competition

Healthcare Trust of America's competitors include HCP Inc. (NYSE:HCP), Health Care REIT (NYSE:HCN) and Healthcare Realty Trust (NYSE:HR). Here is a table comparing these companies.

 

 

 

 

Company HTA HCP HCN HR Industry
Market Cap: 2.12B 20.44B 15.46B 2.07B 1.79B
Employees: 60 147 308 260 131.00
Qtrly Rev Growth (yoy): 0.12 0.08 0.28 0.07 0.18
Revenue: 282.98M 1.86B 1.80B 315.27M 188.11M
Gross Margin: N/A 0.85 0.66 0.62 0.89
EBITDA: 151.34M 1.50B 1.11B 182.47M 182.47M
Operating Margin: 0.15 0.62 0.32 0.26 0.58
Net Income: -17.42M 631.54M 115.40M 8.74M N/A
EPS: -0.08 1.52 0.72 0.19 0.72
P/E: N/A 29.72 82.45 124.03 29.85
PEG (5 yr expected): N/A 2.19 2.45 3.02 2.45
P/S: 7.48 10.97 8.60 6.55 8.35
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Healthcare Trust of America is trading below the industry average P/S ratio.

My analysis

There have been 10 insider buy transactions and there have not been any insider sell transactions during the last 30 days. The company has a book value of $6.00 per share and the stock has a 5.76% dividend yield. I have a cautiously bullish bias for the stock currently based on the fundamental and technical picture.

2. Western Asset Mortgage Capital Corporation (NYSE:WMC) is a REIT that invests primarily in Agency RMBS, which are residential mortgage-backed securities for which the principal and interest payments are guaranteed by a U.S. Government agency (such as GNMA) or a U.S. Government-sponsored entity (such as FNMA or FHLMC).

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Insider buys

  • Gavin James purchased 5,250 shares on December 5 and currently holds 15,850 shares of the company. Gavin James has been the company's president, chief executive officer and director since July 2011.
  • James Hirschmann purchased 20,000 shares on November 21-23 and currently holds 30,000 shares of the company. James Hirschmann has been the chairman of the company's board of directors since July 2009.
  • Travis Carr purchased 1,000 shares on November 13 and currently holds 5,000 shares of the company. Travis Carr has been the company's chief operating officer since July 2011.

Financials

The company reported the third-quarter financial results on November 9 with the following highlights:

Net income $28.2 million
Quarterly dividend $0.85 per share
Net book value $21.76 per share
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Competition

Western Asset Mortgage Capital's competitors include Annaly Capital Management (NYSE:NLY), Newcastle Investment (NYSE:NCT) and Redwood Trust (NYSE:RWT). Here is a table comparing these companies.

 

 

 

 

Company WMC NLY NCT RWT Industry
Market Cap: 498.79M 14.06B 1.44B 1.32B 518.89M
Employees: N/A 147 N/A 77 394.00
Qtrly Rev Growth (yoy): N/A N/A 12.80 0.87 0.11
Revenue: N/A 1.89B 417.96M 132.25M 131.65M
Gross Margin: N/A 1.00 0.98 0.93 0.94
EBITDA: N/A N/A N/A N/A 24.70M
Operating Margin: N/A 0.86 0.88 0.55 0.46
Net Income: N/A 1.46B 391.38M 83.92M N/A
EPS: N/A 1.45 3.06 1.06 0.97
P/E: N/A 9.93 2.73 15.31 13.28
PEG (5 yr expected): N/A -1.19 0.36 3.57 1.52
P/S: N/A 7.44 3.45 9.99 4.17
Dividend % 16.46 13.87 10.53 6.17 N/A
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Western Asset Mortgage Capital has the highest dividend yield among these four companies.

My analysis

There have been seven insider buy transactions and there have not been any insider sell transactions during the last 30 days. There are six analyst buy ratings, 0 neutral ratings and 0 sell ratings with a average target price of $22.05. The stock is trading at a forward P/E ratio of 6.11 and has a 16.46% dividend yield. The stock could be a good pick below the net book value of $21.76 per share.

3. Glu Mobile (NASDAQ:GLUU) is a developer and publisher of freemium games for smartphone and tablet devices.

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Insider buys

  • William Miller purchased 40,000 shares on November 19 and currently holds 50,000 shares of the company. William Miller serves as a director of the company.
  • Benjamin Smith purchased 10,000 shares on November 19 and currently holds 10,000 shares of the company. Benjamin Smith serves as a director of the company.
  • Niccolo de Masi purchased 44,909 shares on November 19 and currently holds 44,909 shares of the company. Niccolo de Masi joined Glu as its President and Chief Executive Officer in January 2010
  • Hany Nada purchased 3,243,218 shares on October 9-11 pursuant to a trading plan designed to comply with Rule 10b5-1 that Granite Global Ventures II and GGV II Entrepreneurs Fund entered into on February 28, 2012. Hany Nada has served on Glu Mobile's Board since April 2005. Hany is a co-founder of GGV Capital.

Financials

The company reported the third-quarter financial results on November 1 with the following highlights:

Revenue $21.3 million
Net loss $3.6 million
Cash $24.1 million
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Outlook

Fourth Quarter Expectations

  • Non-GAAP revenue is expected to be between $19.5 million and $20.5 million and non-GAAP smartphone revenue is expected to be between $17.5 million and $18.5 million.
  • Non-GAAP net loss is expected to be between $(5.1) million and $(4.2) million, or a net loss of $(0.08) to $(0.06) per weighted-average basic share.
  • Cash balance at December 31, 2012 of approximately $21.5 million with no debt.

2012 Expectations - Full Year Ending December 31, 2012:

  • Non-GAAP revenue is expected to be between $86.4 million and $87.4 million and non-GAAP smartphone revenue is expected to be between $73.6 million and $74.6 million.
  • Non-GAAP operating loss is expected to range from $(6.8) million to $(5.9) million.
  • Adjusted EBITDA is expected to range from $(4.4) million to $(3.5) million.

Competition

Glu Mobile's competitors include DeNA Co (OTC:DNACF) and Electronic Arts (NASDAQ:EA). Here is a table comparing these companies.

Company GLUU DNACF EA Industry
Market Cap: 160.90M 4.74B 4.53B 160.90M
Employees: 635 1,810 9,200 1.04K
Qtrly Rev Growth (yoy): 0.26 0.45 -0.01 0.06
Revenue: 81.69M 2.21B 4.10B 81.69M
Gross Margin: 0.88 0.75 0.62 0.62
EBITDA: -11.63M 972.59M 269.00M 331.15K
Operating Margin: -0.24 0.41 0.01 -0.04
Net Income: -23.41M 490.10M 15.00M N/A
EPS: -0.37 3.43 0.05 N/A
P/E: N/A 10.20 322.50 10.67
PEG (5 yr expected): -0.85 N/A 0.95 0.49
P/S: 2.05 2.17 1.10 1.27
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Glu Mobile is growing faster than the industry.

My analysis

The stock made new 52 -week lows in November. There have been three insider buy transactions and there have not been any insider sell transactions during the last 30 days. There are eight analyst buy ratings, two neutral ratings and 0 sell ratings with a average target price of $4.42. The stock is trading at a forward P/E ratio of 244.00. I have a cautiously bullish bias for the stock currently based on the insider trading activity.

4. nTelos Holdings (NASDAQ:NTLS) provides high-speed, dependable nationwide voice and data coverage for over 430,000 retail subscribers based in Virginia, West Virginia and portions of Maryland, North Carolina, Pennsylvania, Ohio and Kentucky.

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Insider buys

  • Daniel Heneghan purchased 7,597 shares on December 3 and currently holds 13,058 shares of the company. Daniel Heneghan has been a director of the company since February 9, 2006.
  • John Turtora purchased 1,000 shares on November 20 and currently holds 3,500 shares of the company. John Turtora is Principal Accounting Officer of the company.
  • Robert McAvoy purchased 1,000 shares on November 13 and currently holds 32,040 shares of the company. Robert McAvoy is Senior Vice President, Engineering and Operations.
  • Conrad Hunter purchased 2,500 shares on November 14 and currently holds 56,563 shares of the company. Conrad Hunter is Executive Vice President, Chief Operating Officer of the company.
  • Brian O'Neil purchased 3,000 shares on November 14 and currently holds 28,526 shares of the company. Brian O'Neil is Executive Vice President, General Counsel & Secretary of the company.
  • Stebbins Chandor purchased 7,500 shares on November 14 and currently holds 44,939 shares of the company. Stebbins Chandor is Executive Vice President, Chief Financial Officer, Treasurer and Secretary of the company.
  • James Hyde purchased 10,000 shares on November 14 and currently holds 171,510 shares of the company. James Hyde is Chief Operating Officer and President of the company.

Financials

The company reported the third-quarter financial results on November 8 with the following highlights:

Revenue $114.5 million
Net income $4.6 million
Quarterly dividend $0.42 per share
Cash $64.6 million
Debt $456.4 million
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Outlook

For the year ended December 31, 2012, the company expects its full year 2012 Adjusted EBITDA to be between $132.0 million and $136.0 million. In addition, the company expects its full year 2012 capital expenditures to be approximately $75.0 million. Lastly, the company reaffirmed previously communicated subscriber development guidance of net positive subscriber growth in both postpaid and prepaid subscribers for the full year 2012.

Competition

nTelos Holdings' competitors include Sprint Nextel Corp. (NYSE:S) and Verizon Communications (NYSE:VZ). Here is a table comparing these companies.

Company NTLS S VZ Industry
Market Cap: 287.04M 17.10B 126.74B 1.20B
Employees: 841 40,000 184,500 3.72K
Qtrly Rev Growth (yoy): 0.07 0.05 0.04 0.22
Revenue: 442.59M 35.06B 114.24B 1.07B
Gross Margin: 0.63 0.41 0.60 0.40
EBITDA: 126.64M 3.08B 31.72B 197.92M
Operating Margin: 0.14 -0.04 0.13 0.09
Net Income: 22.34M -4.31B 3.08B N/A
EPS: -2.04 -1.44 1.08 0.08
P/E: N/A N/A 41.04 15.00
PEG (5 yr expected): 3.97 -0.78 1.57 1.21
P/S: 0.64 0.49 1.11 0.98
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nTelos Holdings is trading below the industry average P/S ratio.

My analysis

The stock has a $9 price target from the Point and Figure chart. There have been seven insider buy transactions and there have not been any insider sell transactions during the last 30 days. There are three analyst buy ratings, 0 neutral ratings and one sell rating with a average target price of $16.50. The stock is trading at a P/E ratio of 13.08 and a forward P/E ratio of 10.32. The stock has a 12.24% dividend yield. I have a neutral bias for the stock currently based on the mixed fundamental and technical picture.

5. Metabolix (NASDAQ:MBLX) is an innovation-driven bioscience company delivering sustainable solutions to the plastics, chemicals and energy industries.

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Insider buys

  • Matthew Strobeck purchased 155,000 shares on November 30 and currently holds 605,000 shares of the company. Matthew Strobeck serves as a director of the company.
  • Robert Van Nostrand purchased 20,000 shares on November 30 and currently holds 20,000 shares of the company. Robert Van Nostrand serves as a director of the company.
  • Robert Engle purchased 25,000 shares on November 30 and currently holds 47,557 shares of the company. Robert Engle is Vice President, Business and Commercial Development, Biopolymers.
  • Lynne Brum purchased 10,000 shares on November 30 and currently holds 10,000 shares of the company. Lynne Brum has served as Vice President of Marketing and Corporate Communications since November 2011.
  • Oliver Peoples purchased 40,000 shares on November 30 and currently holds 370,897 shares of the company. Oliver Peoples is Chief Scientific Officer, Vice President, Research.
  • Richard Eno purchased 20,000 shares on December 3 and currently holds 23,793 shares of the company. Richard Eno has served as President, Chief Executive Officer and Director since March 2008.

Financials

The company reported the third-quarter financial results on November 1 with the following highlights:

Revenue $0.7 million
Net loss $7.7 million
Cash $53.6 million
Net cash per share $1.57
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Outlook

Metabolix currently expects cash usage from operations to be approximately $30 million for 2012, excluding start-up costs relating to the biopolymer manufacturing at Antibióticos. The company currently expects to end 2012 with a cash and investments balance of approximately $44 million, after $3 million of anticipated start-up costs and facility modifications related to the demonstration phase of Antibióticos manufacturing. Nearly all costs incurred in the demonstration phase will be directly applicable to the commercial manufacturing phase.

The company anticipates ending 2012 with an annual cash usage from operations run rate of approximately $24 million, excluding any additional partner funding, grant revenue, other sources of income, or additional start-up costs relating to the commercial manufacturing phase at Antibióticos.

Competition

Metabolix's competitors include BASF (OTCQX:BASFY) and E. I. du Pont de Nemours and Company (NYSE:DD). Here is a table comparing these companies.

Company MBLX BASFY DD Industry
Market Cap: 61.75M 83.21B 40.26B 519.43M
Employees: 119 113,452 70,000 379.00
Qtrly Rev Growth (yoy): 0.44 0.08 -0.10 0.08
Revenue: 2.47M 99.88B 39.43B 862.78M
Gross Margin: N/A 0.26 0.28 0.28
EBITDA: -33.98M 15.31B 6.51B 77.28M
Operating Margin: -14.31 0.11 0.12 0.07
Net Income: 3.54M 6.51B 3.08B N/A
EPS: 0.10 7.08 3.23 1.16
P/E: 18.56 12.79 13.36 13.20
PEG (5 yr expected): N/A 4.44 2.76 1.54
P/S: 29.96 0.84 1.01 0.63
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Metabolix is growing faster than the industry.

My analysis

The stock had a powerful rally last week but could not move above the 200 day moving average. There have been six insider buy transactions and there have not been any insider sell transactions during the last 30 days. There is one analyst buy rating, three neutral ratings and 0 sell ratings with a average target price of $3.50. The stock is trading at a P/E ratio of 18.00 and a forward P/E ratio of 13.85. The company has a net cash position of $1.57 per share. I have a cautiously bullish bias for the stock based on the large cash position and insider trading activity.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in WMC over 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.