Insider Buying: 4 Recent CFO Buys of More Than $40,000

 |  Includes: BKSC, CELG, CMTL, SHO
by: The Keating Letter

In this week’s edition of CFO insider buying, we have four companies that saw CFO purchases of at least $40,000. As I’ve said in the past, I prefer to look at insider buying from CEOs and CFOs. These insiders have a better view on the day-to-day activity of the company and are more likely to know of coming catalysts. Yes, they are human too and can be caught up in emotional buying, so use this list as a starting point for research and treat it as simply an indicator. Click here to view last week’s CFO insider buy article. And, here to view the most recent CEO insider buy article.

Below are four stocks with CFO buys of at least $40,000:

Bank of South Carolina (NASDAQ:BKSC): CFO Sheryl Sharry bought $40,000 worth of shares of this small $45 million market cap bank on June 15. In total, she owns slightly more than 70,000 shares. Three other insiders made purchases along with Sharry, including CEO Hugh Lane. Sharry, along with many of the other insiders, have been making regular purchases since late last year. Given the 4% dividend, strong earnings history, and consistent book value growth, there’s a lot to like about this micro-cap. P/B is around 1.5, which is fair relative to the past ten years. If you decide to buy in, be very careful. Daily volume is anemic.

Celgene (NASDAQ:CELG): Celgene’s CFO, Jacqualyn Fouse, bought $116,500 of company shares on June 14 at an average price of $58.26. After this 2,000 share purchase, she now owns 3,085 shares. Shares of this $28 billion market cap biotech are near 52 week highs after a run up since early February. A few days after Fouse’s purchase, Celgene’s Istodax drug was granted accelerated approval by the FDA for an additional use, potentially helping to diversify future revenue for the company.

Sunstone Hotel Investors (NYSE:SHO): Sunstone Hotel Investors is a REIT focused on upscale hotels in the U.S. CFO John Arabia has made two significant purchases lately. On June 14 he spent $224,300 on company shares at $8.97. Previously, he had bought 50,000 shares on May 11 at $9.94. John Paulson owns about 4% of the company. Like many of his other investments, Sunstone shares are down about 12% so far this year. With a P/E of 10, now might be the time to seriously look at the name though. Citi has an $11 price target on the company.

Comtech Telecommunications (NASDAQ:CMTL): Comtech is a $680 million market cap with a great balance sheet and strong potential growth. CFO Michael Porcelain bought about $70,000 worth of shares on June 14. This is his second purchase this year. I had previously highlighted his $30,000 buy in early April. CEO Fred Kornberg has also been buying lately. With $22 in cash, and shares around $26, Comtech is one to keep an eye on. The share price has fallen below its cash level over the past year. If that happens again, the risk of permanent capital loss for investors would be extremely low.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.