Below are companies that have recently had large insider buying in excess of $200,000 worth of stock. As a caveat, please only consider this as a starting point in your investment research as these are only the opinions of this blogger:
Walter Energy (WLT) is predominately focused on producing and exporting coal for the steel industry. The stock's performance has not been pretty the past year where it currently sits just above its $16.08 52-week low and far from its $58.06 52-week high. Nevertheless, board director Joseph Leonard sees the stock moving higher ,purchasing a sizeable 16,700 shares on May 6. This equates to $475,000 worth of stock. The stock has become more of a value stock as it now trades at just .5x price to sales and 1.2x price to book value. Moreover, it did smash consensus estimates in its most recent quarter, while analysts are expecting robust growth of 30% per annum over the next five years. While its returns on equity and profit margins are not pretty, the company should be a nice beneficiary in the slowly improving economy and as the demand for steel increases. Moreover, investors get a nice 2.6% dividend yield as they wait for the rebound. I think one would be wise though to also keep an eye out for its more established competitors Peabody Energy (BTU) and Arch Coal (ACI).
Peabody Energy is also in the coal mining industry and considerably bigger with annual revenues at approximately $8 billion and a market capitalization at $5.5 billion. The stock, like Walter Energy, has also been atrocious the past year as it too sits not far from its $18.22 52-week low. However, operationally, Peabody has done well, blowing past consensus estimates by an average of 50% the past three quarters. In addition, it trades at reasonable valuation metrics of .7x price to sales and 1.1x price to book value. The company also pays a nice 1.6% dividend yield while investors wait for the gradually improving demand for coal through economic growth.
Arch Coal is a coal miner that is no slouch in size as well, with approximately $4 billion in annual sales and a market capitalization at approximately $1 billion. The company's stock price has been no exception as it too sits just about 10% from its $4.47 52-week low. Nevertheless, the company has met or exceeded consensus estimates in each of the last four quarters showing strong execution. In addition, it shows the cheapest valuations of the three trading at .3x price to sales and .4 x price to book value. Lastly, with a 2.3% dividend yield, investors get an attractive payout while they wait for the eventual economic demand.
United States Steel (X) is a massive steel producer with annual revenues in excess of $18 billion and market capitalization over $2.5 billion. The stock price has been choppy the past year with it currently sitting just about 15% above its 52-week low. Board director Murry Gerber seems to be bullish on the stock though, snapping up 12,925 shares on May 8. This equates to approximately $240,000 worth of stock. Operationally, the company has executed well, exceeding consensus estimates in three of the last four quarters. Moreover, the company is now trading at an attractive .15x price to sales and .8x price to book valuation. As the demand for steel slowly improves, US Steel will benefit from it and while investors wait, they get a reasonable 1% dividend yield. Moreover, one should look at the far larger ArcelorMittal (MT) steel producer if looking to diversify.
ArcelorMittal is far larger with annual revenues in excess of $80 billion and a market capitalization over $20 billion. The stock has also been battered as it sits not far from its $11.15 52-week low. However, the company just reported a solid quarter where it exceeded consensus estimates by 7% and reaffirmed its full year projections. In addition, the company is now trading at a cheap .3x price to sales and .45x price to book valuation. The company also counts its Chairman and CEO, Lakshmi Mittal, as its largest shareholder, which is always encouraging. Lastly, the company pays a respectable 1.6% dividend (many finance sites are still displaying its prior $.68 annual dividend when it is currently $.20) while investors wait, like the other companies mentioned above, for the resurgent steel demand.