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There was intensive insider buying in Dole Food Company (DOLE) in May 2010 when the stock was trading below $10. The stock ran as high as $14.99 in February 2011, or 70.1% above the low made in May 2010.

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With this episode in mind, I screened for stocks, which have seen recent intensive insider buying. 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%.

In this article I will feature two consumer goods stocks that have seen intensive insider buying during the last 30 days.

1. Pitney Bowes (PBI) provides software, hardware, and services to enable physical and digital communications in the United States and internationally.

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Insider buying by insider (last 30 days)

  • Mark Wright purchased 15,000 shares on June 6, and currently holds 15,000 shares or less than 0.1% of the company. Mark Wright was named Executive Vice President and President, Pitney Bowes Software Solutions in April 2013.
  • Mark Shearer purchased 10,000 shares on May 17, and currently holds 10,000 shares or less than 0.1% of the company. Mark Shearer was appointed Executive Vice President and President, Pitney Bowes SMB Mailing Solutions in April, 2013.
  • Marc Lautenbach purchased 66,000 shares on May 7, and currently holds 66,000 shares or less than 0.1% of the company. Marc Lautenbach is President and Chief Executive Officer of the company.

Insider buying by calendar month

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

MonthInsider buying / sharesInsider selling / shares
June 201315,0000
May 201376,0000
April 201300
March 201300
February 201300
January 201300

There have been 91,000 shares purchased and zero shares sold this year.

Financials

The company reported the first-quarter financial results on April 30, with the following highlights:

Revenue$1.2 billion
Net income$67.5 million
Cash$947.4 million
Debt$4.0 billion

Outlook

The company expects 2013 revenue, excluding the impacts of currency, to be in the range of flat to 3 percent growth when compared to 2012, and expects adjusted earnings per diluted share to be in the range of $1.85 to $2.00.

Competition

Pitney Bowes' competitors include Siemens (SI) and Xerox (XRX). Here is a table comparing these companies.

CompanyPBISIXRXIndustry Average (Business Equipment)
Market Cap:2.95B89.47B11.26B32.39B
Employees:27,400366,000143,200194.98K
Qtrly Rev Growth (yoy):-0.04-0.07-0.030.09
Revenue:4.85B100.02B22.24B44.06B
Gross Margin:0.500.280.310.47
EBITDA:954.92M11.59B3.00B7.10B
Operating Margin:0.150.080.080.07
Net Income:364.51M6.38B1.20BN/A
EPS:1.756.550.922.23
P/E:8.3516.209.9312.16
PEG (5 yr expected):-1.250.241.200.92
P/S:0.580.890.490.74

Pitney Bowes' P/S and P/E ratios are below the industry average.

My analysis

There have been three different insiders buying the shares and there have not been any insiders selling the shares during the last 30 days. The company has an insider ownership of 0.36%. There are two analyst buy ratings, three neutral ratings and zero sell ratings with an average target price of $17.00. The stock is trading at a P/E ratio of 8.35 and a forward P/E ratio of 7.79. The company has a book value of $0.36 per share and the stock has a dividend yield of 5.12%. The 200 -day moving average is currently at $12.95, which could be a good entry point for the stock.

2. Premium Brands Holdings Corporation (OTC:PRBZF) manufactures and distributes food products in Canada and the United States.

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Insider buying by insider (last 30 days)

  • John Beliveau purchased 3,090 shares on May 27, pursuant to a purchase/ownership plan. John Beliveau currently holds 51,981 shares or 0.2% of the company. John Beliveau is an insider of the company.
  • David Carriere purchased 7,053 shares on May 27, pursuant to a purchase/ownership plan. David Carriere currently holds 67,818 shares or 0.3% of the company. David Carriere is a senior officer of the company.
  • Conrad Huber purchased 1,132 shares on May 27, pursuant to a purchase/ownership plan. Conrad Huber currently holds 1,604 shares or less than 0.1% of the company. Conrad Huber is an insider of the company.
  • Gerhart Huber purchased 842 shares on May 27, pursuant to a purchase/ownership plan. Gerhart Huber currently holds 1,512 shares or less than 0.1% of the company. Gerhart Huber is an insider of the company.
  • Wilhelm Huber purchased 2,521 shares on May 27, pursuant to a purchase/ownership plan. Wilhelm Huber currently holds 3,728 shares or less than 0.1% of the company. Wilhelm Huber is an insider of the company.
  • William Kalutycz purchased 4,366 shares on May 27, pursuant to a purchase/ownership plan. William Kalutycz currently holds 85,753 shares or 0.4% of the company. William Kalutycz is Chief Financial Officer of the company.
  • George Paleologou purchased 6,180 shares on May 27, pursuant to a purchase/ownership plan. George Paleologou currently holds 179,365 shares or 0.9% of the company. George Paleologou has been the President and Chief Executive Officer of the company since May 2008.
  • Kenneth Propp purchased 4,366 shares on May 27, pursuant to a purchase/ownership plan. Kenneth Propp currently holds 47,368 shares or 0.2% of the company. Kenneth Propp is an insider of the company.
  • Stephen Sposari purchased 10,962 shares on May 27, pursuant to a purchase/ownership plan. Stephen Sposari currently holds 69,296 shares or 0.3% of the company. Stephen Sposari is an insider of the company.

Insider buying by calendar month

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

MonthInsider buying / sharesInsider selling / shares
May 201340,5120
April 20135000
March 201300
February 20131380
January 201300

The month of May has seen the most insider buying this year.

Financials

The company reported the first-quarter financial results on May 9, with the following highlights:

Revenue$229.2 million
Net income$1.2 million
Cash$3.8 million
Debt$360.3 million

Competition

Premium Brands competes with many local, regional and national food manufacturers and distributors and its competition varies by distribution channel, product category and geographic market. Certain of Premium Brands' competitors have greater financial and other resources than those of Premium Brands' or may have access to labor or products that are not available to Premium Brands.

In addition, it is possible that some of Premium Brands' suppliers or customers could become competitors of Premium Brands if they decide to distribute their own food products. Furthermore, if one or more of Premium Brands' competitors were to merge or partner with another of its competitors, the change in the competitive landscape could adversely affect Premium Brands' ability to compete effectively. Competitors may also establish or strengthen relationships with parties with whom Premium Brands has relationships, thereby limiting its ability to distribute certain products. Disruptions in Premium Brands' business caused by these events could have a material adverse effect on its results of operations and financial condition.

My analysis

There have been nine different insiders buying the shares and there have not been any insiders selling the shares during the last 30 days. There are three analyst buy ratings, two neutral ratings and zero sell ratings with an average target price of $20.00. The stock is trading at a P/E ratio of 25.64 and a forward P/E ratio of 12.32. The company has a book value of $9.57 per share and the stock has a dividend yield of 6.68%. The 200-day moving average is currently at $17.47, which could be a good entry point for the stock.

Source: 2 Consumer Goods Companies With Recent Intensive Insider Buying