As a caveat, please only consider this as a starting point in your investment research as these are only the opinions of this blogger. If looking for other recent stocks with sizable insider buying, look at these articles linked here and here:
Hecla Mining (NYSE:HL) is a worldwide precious metals miner based in Idaho. The company has been in existence since 1891 and has now grown to a sizeable company with an over $300 million trailing twelve months revenue stream and market capitalization near $1 billion. The stock has not performed well in the past year though, now sitting just above its $2.95 52-week high. Nevertheless, President and CEO Phillips Baker sees the stock moving higher. On May 14th, Mr. Baker acquired a sizeable 150,000 shares equating to over $475,000 worth of stock.
Operationally the company has performed well though missing consensus estimates in three of the last four quarters. On the other hand, the stock is trading at a relatively cheap .8x price to book ratio and 8x forward price to earnings valuation. In addition, the company has minimal debt and approximately $145 million in net cash. The stock is worth a look and if wisely looking to diversify, Freeport-McMoran (NYSE:FCX) and Barrick Gold (NYSE:ABX) appear to fit the bill.
Freeport-McMoran is a far bigger company with approximately $18 billion in annual revenues and a market capitalization in excess of $30 billion. The company is more diversified by mining precious metals as well as copper, cobalt, molybdenum, and other metals. The stock has been essentially flat the past year due to a recent run-up in the share price, but is still showing what see as strong value. The first aspect that jumps out in my mind is the very nice 3.8% dividend yield. In addition, at just a 41% payout ratio, investors can reasonably expect that to be safe-- and perhaps even be raised in the near future. Moreover, the 10.5x trailing and 8x forward P/E are certainly attractive and rather cheap for such a well-run company. Add in the fantastic returns on equity in excess of 18% and I think the stock will move higher in the future.
Barrick Gold is another massive company generating over $14 billion in annual revenues and a market capitalization in nearing $20 billion. The company is somewhat different in that it virtually only mines gold and copper. Nonetheless, the stock is down roughly 50% the past year and has now come down to some cheap valuations. A 5.5x forward P/E is comparatively cheap to its peers. Moreover, a .8x price to book valuation further shows that "Mr. Market" may have become too negative on this mining stock. Lastly, and perhaps most importantly, the company pays a consistent 4.3% dividend yield. With the company exceeding consensus estimates in each of the last two quarters, it looks as though it is back on track and poised to move higher, while investors get a healthy dividend in the meantime.
MEMC Electronic Materials (WFR) is a developer of solar related products, predominately silicon wafers. The stock has been absolutely fantastic in the past year, surging approximately 300% and sitting at a new 52-week high. Nevertheless, President and CEO Ahmad Chatila sees the stocks moving higher buying 68,100 shares on May 14th equating to almost $410,000 worth of stock. Operationally, the company has done well, exceeding estimates in three of the last four quarters. Even with the big run-up, the company is still trading at a reasonable 15x forward P/E and .6x price to sales ratio. However, the company does have a sizable 2.5 billion debt load and approximately negative $2 billion net cash position. In addition, the company has shown an uninspiring negative 24% return on equity. I would be cautious on the company for now until there is more clarity on how management plans to address the debt load and ugly returns on equity. However, if looking to be in the solar space, First Solar (NASDAQ:FSLR) makes more sense to me.
First Solar essentially provides solar energy solutions to investor owned utilities, commercial companies, and other such entities. The company's stock has also surged the past year-- like MEMC coincidentally-- up approximately 300% and now sitting at a new 52-week high. However, differences seem to arise there where First Solar has a far more manageable $562 million debt load and positive net cash position in excess of $425 million. In addition, the company is sporting healthy returns on equity of 12%. Lastly, the company actually earned money in the past year and is trading at a reasonable 16x forward P/E. Again, as a caveat though, alternative energy stocks like these two mentioned above are generally considered to be rather speculative and should be treated accordingly in one's portfolio.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in FCX, HL, ABX, FSLR 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.