All of these companies have recently reported insider buying. The fact that insiders are buying these names could be a good sign that there is significant upside potential in these shares. I took a closer look at each of these companies to evaluate what might be causing the insider buying. I have provided links for each stock which verifies the insider buying filed with the SEC below. Here are the companies:
Cenveo, Inc., (NYSE:CVO) is trading around $6.68. CVO is a printing company, based in Connecticut. The 50-day moving average is $5.88 and the 200 day moving average is $5.71. These shares have traded in a range between $4.80 to $14 in the last 52 weeks. There have been multiple insiders buying including the CEO, officers, and directors, with the most recent purchase being a director who bought 2,000 shares. You can see the repeated insider buying over the past few months here.
What Cenveo insiders and other investors might be seeing: Before the recession, these shares traded for over $20 per share. The economy has slowly been improving and it sure looks like insiders must be seeing the possibility of a turnaround for the printing business. The CVO balance sheet has a significant amount of debt and this company has recently been reporting losses. Cenveo recently acquired another major envelope business which you can read about here. This could be an interesting turnaround stock, however, because the stock has risen well above the 50 and 200 day moving averages, I would wait for pullbacks to around $6.
Hyperdynamics Corporation (NYSE:HDY) shares are trading at $4.55. HDY is a oil and gas exploration company, based in Texas. The 50-day moving average is $5.21 and the 200 day moving average is $3.28. These shares have traded in a range between 90 cents to $7.78 in the last 52 weeks. You can see the insider buying here.
What Hyperdynamics insiders and others might be seeing: Shares in HDY recently plunged from over $6.50 to under $5, so insiders might be trying to do some "bargain hunting." The shares dropped on news that HDY would be raising capital by selling shares at $5 each which you can read about here. HDY recently selected an offshore drilling rig to begin drilling in the Republic of Guinea. You can read more about that here.
ModusLink Global Solutions, Inc., (NASDAQ:MLNK) is trading at $5.38. MLNK is based in Massachusetts and provides business management solutions. These shares have a 52 week range of $5.09 and $9.22. The 50-day moving average is $5.53 and the 200 day moving average is $5.67, so the shares are trading below these key support levels. Earnings estimates for MLNK are not available. Book value is stated at $6.71 per share. You can see the repeated insider buying here.
What ModusLink insiders and other investors might be seeing: MLNK has a substantial amount of cash on it's balance sheet. According to Yahoo Finance, this company has about $154 million in cash and almost no debt. This is equivalent to around $3.57 per share in cash. However, this company recently announced a special cash dividend of about $40 million which would reduce cash balances. You can read more about that special dividend of around 91 cents per share, which was recently paid, here.
General Maritime (NYSE:GMR) is trading around $2.37. GMR is a shipping company, primarily providing transportation services of oil by sea, and is based in New York. These shares have traded in a range between $1.75 to $8.82 in the last 52 weeks. The 50-day moving average is $2.56 and the 200 day moving average is $3.96. GMR is estimated to post a loss of 74 cents in 2011 and 44 cents in 2012. You can see the recent insider buying here.
What General Maritime insiders and other investors might be seeing: Shares in GMR recently plunged from about $3 to around $2, so insiders might be trying to do some "bargain hunting." The shares dropped on news that GMR would be raising capital by selling shares at $2 per share which you can read about here. These shares are up almost 20% from the offering price, which is what insiders bought into. Because of this, I would not buy now. However, these shares could be an interesting speculation if they retest the recent lows around $2.
Dynegy, Inc., (NYSE:DYN) is trading around $5.71. Dynegy is a energy generating company, and is based in Texas. These shares have traded in a range between $2.76 to $7.05 in the last 52 weeks. The 50-day moving average is $5.80 and the 200 day moving average is $5.03. DYN is estimated to lose about $1.28 per share in 2011 and $1.27 for 2012. You can see the insider buying here.
What Dynegy insiders and other investors might be seeing: According to Yahoo Finance, the book value is stated at $22.68 and they also report a substantial amount of debt on the balance sheet. I would be concerned about the accuracy and/or assets the book value represents. Overall, I am not sure what investors or insiders are seeing here. You can read an in depth analysis of DYN here.
The data is sourced from Yahoo Finance, Stockcharts.com and Insidercow.com. The information and data is believed to be accurate, but no guarantees or representations are made. Rougemont is not a registered investment advisor and does not provide specific investment advice. The information contained herein is for educational purposes only.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.