Each week I highlight large CEO purchases of company shares. To view last week's edition, visit here. This week we have four stocks with CEO buys of at least $150,000. I prefer to look at CEO and CFO buys more than director purchases since management should be more privy to potential catalysts and have a better understanding of the day to day activities of the company.
This list should be used to generate ideas. Insider buying alone shouldn’t be enough of a reason to buy shares. However, if management is bullish on the stock and the fundamentals indicate the stock is cheap or a surprise upside in the numbers may be coming, one of these stocks may be attractive. Let's take a look at recent major purchases and I'll offer a few thoughts.
The four stocks with recent CEO buys of at least $150,000 are below:
China TransInfo Technology (CTFO): CTFO has been popping up on this list weekly. CEO Xia Shudong has been aggressively buying company stock since February 25. Shudong’s latest purchase was on April 13. He bought 33,400 shares at $4.67 for a total purchase of $156,000. Shares have gone up about 5% since his first purchase and appear to be cheap for this $120 million market cap company.
Excel Trust (EXL): Excel Trust CEO Gary Sabin bought $653,000 of shares on April 6. After this purchase he owns 913,247 shares. Excel Trust is a REIT focusing on shopping centers and strip malls. Excel Trust went public a bit less than a year ago and shares are down about 10% since the IPO. On April 6 the company announced the purchase of two properties for $92.1 million. Management expects to increase the dividend this year to between $0.60 and $0.75 per share. They have set themselves up well as buyers to begin capitalizing on rising rents and discounted property prices. Their current 4.9% dividend doesn't hurt as well.
CVR Partners, LP (UAN): CVR Partners completed their IPO on April 13. Shares were priced at $16 and included 22,080,000 common units. CVR Partners is a limited partnership and a subsidiary of CVR Energy. The partnership owns and operates a nitrogen fertilizer business. CEO John Lipinski bought 187,500 shares totaling $3 million. Shares are trading more than 11% higher than the IPO price. With a huge expected yield by next year, this is one that will provide solid income for the forseeable future.
AVI BioPharma (AVII): AVI completed a $30 million public offering on April 4. This doubles the size of AVI’s cash balance and will be used towards the development of Duchenne's muscular dystrophy (DMD) candidate AVI-4658. Phase II trials are scheduled to begin in the second half of 2011. CEO Christopher Nishan Garabedian participated in the offering and purchased $195,000 worth of shares at the $1.50 offering price. I don't have an opinion on the odds of AVI-4658's success, but the insider purchases display confidence in the trials.