The Chief Executive Officer is often considered the most respected individual in a company to follow. After all, he is the captain at the ship's helm, making the necessary adjustments to safely navigate the company into clear channels of profitability. He is the head of the company, the one employed to be aware of the surrounding situation in regards to the company's future. Therefore, when a CEO buys his own company's stock, it can often be a strong symbolic commitment from the one in charge. After all, when insiders buy, investors should pay attention. By following those who are understood to have a greater knowledge of the company's opportunities, investors can often follow suit and enjoy the rewards of a more timely purchase.
Open market purchases in particular can often express a form of opportunistic voluntary commitments. They do not reflect alternative motives, which could be found in the time decay of exercised options or warrants. Additionally, these purchases abide by the thought that while there are many reasons for insiders to sell their shares, there are often very few reasons to buy shares apart from an expectation of future value to come about from the transaction. This is why we want to keep an eye on the company leader when he makes transactions pertaining to the company he's running.
The following 10 companies recently found their CEOs making rather large insider purchases. This can often be the prelude to a rise in the stock's market value. However, as is typically the case, remember that insider purchases are just one form of information that should be analyzed prior to making any investment decisions. It is most often considered wise to look at the company's financials, chart performance and recent news in order to more accurately assess the risks, benefits, and overall stability of the possible investment at hand.
|Malon Wilkus||American Capital Agency Corp (AGNC)||12/04/12||9,500||$31.62||$300,390|
|Tuan Ha-Ngoc||AVEO Pharmaceuticals, Inc (AVEO)||12/12/12||75,000||$6.65||$498,955|
|Frank H. Laukien||Bruker Corp. (BRKR)||12/07/12||50,000||$13.97||$698,615|
|John Thomas De Meritt||Francesca's Holdings Corp. (FRAN)||12/12/12||10,000||$23.21||$232,094|
|Timothy P. Taft||Fiesta Restaurant Group Inc. (FRGI)||12/13/12||10,000||$14.73||$147,268|
|Michael P. Connors||Information Services Group Inc. (III)||12/06/12||100,000||$1.03||$103,000|
|Phillip Frost||Opko Health Inc (OPK)||12/13/12||30,000||$4.56||$136,749|
|Howard Levkowitz||TCP Capital Corp. (TCPC)||12/07/12||10,000||$14.90||$148,993|
|Thomas D. Brisbin||Willdan Group Inc. (WLDN)||12/05/12||50,000||$2.00||$100,000|
|Todd Alan Brooks||Zaza Energy Corp. (ZAZA)||12/14/12||196,850||$2.05||$404,522|
Of these transactions in particular, one of the easiest to stand out is the recent purchase made by Malon Wilkus, the CEO of American Capital Agency Corp. The company is well known for its ability to consistently pay a dividend yield in excess of 10%. Questions over the sustainability of that yield is what makes the CEO's latest purchase worthy of watching. Mr. Wilkus purchased $9,500 shares of common stock at $31.62 per share for a value of $300,390, as reported in the amended filing found here. A look at the recent insider purchase history shows that he's not alone in his bullish outlook on the company. Company Director Alvin Puryear and Executive VP Samuel A. Flax share his sentiment, as witnessed by their own purchases on December 10 and November 13, respectively. Such a cluster buy by insiders can often be indicative of the market's undervalued outlook of the company's future.
Another CEO purchase that merits highlighting comes from Dr. Phillip Frost of Opko Health, Inc. Dr. Frost has been purchasing very large tracts of shares nearly every day for multiple months. In November alone, the CEO's purchases valued $3.65 million. His latest purchase on December 13 accounts for another 30,000 shares made between a price range of $4.50 to $4.58, as seen on the Form 4 filed here. Indirectly, Dr. Frost now owns 134,971,300 common shares of Opko. With roughly 298.18 million shares outstanding, Dr. Frost currently owns over 45% of the company.
Disclosure: I am long OPK.