Seeking Alpha
Long/short equity, insider ownership
Profile| Send Message|
( followers)  

Since my March 20 article titled "1 Pharmaceutical, 1 Technology And 1 Financial Stock With Recent Intensive Insider Buying," the stocks that I featured have performed as follows:

CompanyPrice 3/18Price 3/28Change
Navidea Biopharmaceuticals (NYSEMKT:NAVB)$2.78$2.71-2.5%
Park City Group (NASDAQ:PCYG)$3.55$3.70+4.2%
JMP Group (NYSE:JMP)$6.55$6.91+5.5%

In this article, I will feature three additional stocks that have seen intensive insider buying during the last 30 days. 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 increased their holdings by more than 10%.

1. Acorn Energy (NASDAQ:ACFN) provides technology driven solutions for energy infrastructure asset management worldwide.

(click to enlarge)

Insider buying by insider (last 30 days)

  • Mannie Jackson purchased 4,000 shares on March 22 and currently controls 8,100 shares or less than 0.1% of the company. Mannie Jackson serves as a director of the company.
  • Christopher Clouser purchased 4,000 shares on March 21 and currently controls 35,300 shares or 0.2% of the company. Christopher Clouser serves as a director of the company.
  • John Moore purchased 9,855 shares on March 4-20 and currently holds 894,777 shares or 5.0% of the company. John Moore has been a director and Chief Executive Officer of the company since March 2006.
  • Richard Rimer purchased 5,000 shares on March 21 and currently holds 54,400 shares or 0.3% of the company. Richard Rimer serves as a director of the company.

Insider buying by calendar month

Here is a table of Acorn Energy's insider trading activity by calendar month.

MonthInsider buying / sharesInsider selling / shares
March 201322,9410
February 201300
January 201300
December 20124,0110
November 201219,9000
October 201200
September 201200
August 20122,9100
July 201200
June 201210,0000
May 201210,0000
April 201200
March 201215,0380

The month of March 2013 has seen the most insider buying.

Financials

The company reported the full year 2012 financial results on March 18 with the following highlights:

Revenue$19.4 million
Net loss$16.7 million
Cash$22.7 million
Debt$0.2 million

Outlook

John Moore, President and CEO of Acorn, commented on March 18:

"This year, US Seismic will evolve from testing to a commercial solution for the oil and gas industry. We expect to announce follow on orders from our early adopters and initial orders from a national oil company and a major oil services company in the first half of 2013.

We have a plan. We are working the plan. The plan says we will be cash flow positive in 2014. Each of our businesses is at a different point in the commercial spectrum and we are investing aggressively to mature each of them to the point where they are self sustaining. I am extremely excited about the future of our company."

Competition

Acorn Energy's competitors include Schlumberger (NYSE:SLB) and Siemens (SI). Here is a table comparing these companies.

CompanyACFNSLBSIIndustry Average (Technical Services)
Market Cap:138.79M99.75B91.07B6.42M
Employees:192118,000365,000N/A
Qtrly Rev Growth (yoy):-0.370.090.020.00
Revenue:19.42M42.15B101.72B4.71M
Gross Margin:0.270.220.280.40
EBITDA:-19.04M11.02B12.47B265.08K
Operating Margin:-1.050.180.090.12
Net Income:-16.71M5.44B6.52BN/A
EPS:-0.934.106.330.01
P/E:N/A18.3317.0867.14
PEG (5 yr expected):-0.400.910.23N/A
P/S:7.152.370.901.36

Acorn Energy is trading above the industry average P/S ratio.

My analysis

There have been five insider buy transactions and there have not been any insider sell transactions during the last 30 days. There are two analyst buy ratings, zero neutral ratings and zero sell ratings with an average target price of $12.65. The company has a book value of $3.20 per share and the stock has a dividend yield of 1.82%. The company is expecting to be cash flow positive in 2014. I have a neutral bias for the stock currently based on the mixed fundamental and technical picture.

2. CAE Inc. (NYSE:CAE) designs, manufactures, and supplies simulation equipment services; and develops integrated training solutions for the military, commercial airlines, business aircraft operators, aircraft manufacturers, healthcare education and service providers, and mining industry worldwide.

(click to enlarge)

Insider buying by insider (last 30 days)

  • Nathalie Bourque purchased 2,495 shares on March 26 pursuant to a purchase/ownership plan. Nathalie Bourque currently holds 6,358 shares or less than 0.1% of the company. Nathalie Bourque has served as Vice President, Public Affairs and Global Communications at CAE since 2005.
  • Sonya Branco purchased 1,144 shares on March 26 pursuant to a purchase/ownership plan. Sonya Branco currently holds 2,356 shares or less than 0.1% of the company. Sonya Branco is Vice President, Corporate Controller.
  • Bernard Cormier purchased 3,291 shares on March 26 pursuant to a purchase/ownership plan. Bernard Cormier currently holds 8,977 shares or less than 0.1% of the company. Bernard Cormier joined CAE as Vice President, Human Resources, in July 2010.
  • Stephane Lefebvre purchased 3,015 shares on March 26 pursuant to a purchase/ownership plan. Stephane Lefebvre currently holds 20,979 shares or less than 0.1% of the company. Stephane Lefebvre was named CAE's Vice President, Finance and Chief Financial Officer in May 2011 with global responsibility for the company's finance and information technology activities.
  • Nick Leontidis purchased 3,352 shares on March 26 pursuant to a purchase/ownership plan. Nick Leontidis currently holds 25,422 shares or less than 0.1% of the company. Nick Leontidis was appointed Executive Vice President, Strategy and Business Development at CAE in March 2009.
  • Sylvie Brossard purchased 1,897 shares on March 26 pursuant to a purchase/ownership plan. Sylvie Brossard currently holds 12,259 shares or less than 0.1% of the company. Sylvie Brossard is an insider of the company.
  • Gennaro Colabatistto purchased 1,295 shares on March 27 pursuant to a purchase/ownership plan. Gennaro Colabatistto currently holds 1,295 shares or less than 0.1% of the company. Gennaro Colabatistto was appointed Group President of CAE's Military Simulation Products, Training and Services Group in June 2012.
  • Marc Parent purchased 7,580 shares on March 26 pursuant to a purchase/ownership plan. Marc Parent currently holds 49,924 shares or less than 0.1% of the company. Marc Parent was appointed President and Chief Executive Officer of CAE in August 2009.
  • Mario Poirier purchased 1,743 shares on March 26 pursuant to a purchase/ownership plan. Mario Poirier currently holds 4,529 shares or less than 0.1% of the company. Mario Poirier is a senior officer of CAE.
  • Jeffrey Roberts purchased 5,095 shares on March 26 pursuant to a purchase/ownership plan. Jeffrey Roberts currently holds 40,914 shares or less than 0.1% of the company. Jeffrey Roberts was appointed Group President, Civil Simulation Products, Training and Services in April 2009.

Insider buying by calendar month

Here is a table of CAE's insider trading activity by calendar month.

MonthInsider buying / sharesInsider selling / shares
March 201331,5820
February 201300
January 201300
December 20127,9300
November 201200
October 201200
September 201200

The month of March 2013 has seen the most insider buying.

Financials

The company reported the third-quarter fiscal 2013, which ended December 31, 2012, financial results on February 13 with the following highlights:

Revenue$522.1 million
Net income$37.8 million
Net debt$965.4 million

Competition

CAE's competitors include BAE Systems (OTCPK:BAESY) and L-3 Communications Holdings (NYSE:LLL). Here is a table comparing these companies.

CompanyCAEBAESYLLL
Market Cap:2.56B19.02B7.21B
Employees:8,000N/A51,000
Qtrly Rev Growth (yoy):0.15N/A0.01
Revenue:2.06B26.71B13.15B
Gross Margin:0.310.080.10
EBITDA:452.50M3.34B1.60B
Operating Margin:0.150.090.10
Net Income:151.65M1.71B778.00M
EPS:0.592.108.30
P/E:16.7611.139.66
PEG (5 yr expected):1.2630.4315.67
P/S:1.240.710.55

CAE is growing faster than its competitors.

My analysis

There have been 15 insider buy transactions and there have not been any insider sell transactions during the last 30 days. There are five analyst buy ratings, four neutral ratings and zero sell ratings with an average target price of $12.36. The stock is trading at a P/E ratio of 16.76 and a forward P/E ratio of 12.15. The company has a book value of $4.04 per share and the stock has a dividend yield of 1.93%. I have a bullish bias for the stock currently based on the intensive insider buying.

3. Kratos Defense & Security Solutions (NASDAQ:KTOS) provides mission critical products, services, and solutions in the United States and internationally.

(click to enlarge)

Insider buying by insider (last 30 days)

  • Eric Demarco purchased 54,413 shares on March 15-18 and currently holds 263,103 shares or 0.5% of the company. Eric Demarco is President and Chief Executive Officer of Kratos.
  • Jane Judd purchased 6,000 shares on March 15 and currently holds 16,000 shares or less than 0.1% of the company. Jane Judd serves as a director of the company.
  • Phillip Carrai purchased 4,500 shares on March 18 and currently holds 21,995 shares or less than 0.1% of the company. Phillip Carrai is President, KTTS Division.
  • Deanna Lund purchased 2,000 shares on March 18 and currently holds 45,372 shares or less than 0.1% of the company. Deanna Lund has served as Chief Financial Officer for Kratos since April 2004.
  • Richard Poirier purchased 5,000 shares on March 15 and currently holds 27,677 shares or less than 0.1% of the company. Richard Poirier is President, Electronic Products.

Insider buying by calendar month

Here is a table of Kratos' insider trading activity by calendar month.

MonthInsider buying / sharesInsider selling / shares
March 201371,9130
February 201300
January 201300
December 201264,6250
November 201200
October 201200
September 201200
August 201263,2700
July 201200
June 201200
May 201211,064,2520
April 201200
March 201200

There have been 11,264,060 shares purchased and zero shares sold since March 2012.

Financials

The company reported the full year 2012 financial results on March 12 with the following highlights:

Revenue$969.2 million
Net loss$114.4 million
Cash$49.0 million
Debt$648.4 million

Outlook

Kratos' full year 2013 guidance is as follows:

Revenue$950 million to $1 billion
Adjusted EBITDA$115 million to $125 million
Adjusted free cash flow$50 million

Competition

Kratos' competitors include CACI International (NYSE:CACI) and Computer Sciences Corporation (NYSE:CSC). Here is a table comparing these companies.

CompanyKTOSCACICSCIndustry Average (Security & Protection Services)
Market Cap:286.06M1.29B7.44B35.94M
Employees:4,30014,50098,000466.00
Qtrly Rev Growth (yoy):0.24-0.040.030.23
Revenue:969.20M3.74B15.78B77.70M
Gross Margin:0.270.310.190.33
EBITDA:102.20M335.99M1.83B6.78M
Operating Margin:0.050.080.050.06
Net Income:-112.90M159.64M212.00MN/A
EPS:-2.446.213.350.23
P/E:N/A9.0014.4715.95
PEG (5 yr expected):-0.870.602.54N/A
P/S:0.300.340.471.97

Kratos is trading below the industry average P/S ratio, which could explain some of the insider buying.

My analysis

There have been five different insiders buying the shares and there have not been any insiders selling the shares during the last 30 days. There are two analyst buy ratings, four neutral ratings and zero sell ratings with an average target price of $7.50. The stock is trading at a forward P/E ratio of 510.00 and the company has a book value of $5.73 per share. I believe the stock could be a good pick below the book value.

Source: 1 Technology, 1 Aerospace And 1 Security Stock With Recent Intensive Insider Buying