Larger CFO buys have tailed off in the past few weeks. This week’s CFO insider buying edition features four CFOs who made purchases of smaller amounts, only $18,000. These four names are all small-caps and are speculative in nature. I had a hard time valuing these companies because of the high degree of uncertainty with them. That being said, you might be interested in looking a bit deeper to discover why their CFOs made recent purchases.
Stag Industrial (STAG): Stag changed its ticker symbol from STIR to STAG on June 13. Even with the ticker symbol change, you may not have heard of the company. Stag is a real estate company focusing on Class B industrial properties. These are primarily warehouses, manufacturing and office buildings. On April 15 it had an IPO at $13 per share. CFO Gregory Sullivan participated in the IPO and also bought shares on April 25, June 3, June 6, and most recently on June 15. He currently owns 39,564 shares.
It’s tough to value this company since its most recent capitalization. I’m also not as familiar with its setup. According to a recent Seeking Alpha article, the company is an upreit, not a REIT. An upreit “is formed by combining properties from existing Limited Partnerships.” JP Morgan gives it a neutral rating.
BioTime (BTX): CFO Robert Peabody bought 5,400 shares of the company on June 22 for a total purchase of $24,000. BioTime is a $268 million market cap biotech concentrating on stem cell technology and blood plasma volume expanders. The company’s lead product is Hextend, which is distributed by Hospira (HSP). Again, this company is tough to put a valuation on for me, but it's cash-rich with $30 million in cash. That should last it at least a couple of years until its products have a chance of taking hold and generating more revenue.
Casella Waste Systems (CWST) is a $159 million market cap waste disposal and recycling company. It has had losses since 2006, although free cash flow is slightly positive. CFO Edwin Johnson has been buying up shares this year on four different occasions. His most recent buys were on June 23 and 24 for a total of 11,000 shares for $56,750. Conversely, CEO John Casella and its general counsel have sold in the past week. The firm's 2012 guidance appears positive, which may account for Johnson’s bullishness.
Adolor (ADLR): CFO Stephen Webster bought 10,000 shares of this biotech company on June 27. Unfortunately, this only totaled $18,800. There was a recent bullish article on Seeking Alpha that provides excellent background information. The company focuses on pain management products. It is near its 52-week highs. Like the other stocks above, this one is very difficult to value because of the uncertainty.