If you are looking for potentially undervalued opportunities, one interesting way to search further is by looking at insider buying trends. If a company that may be undervalued is seeing a lot of insider buying, insiders may also think the company is undervalued.
We ran a screen on companies undervalued relative to earnings growth (with PEG less than 1) that are currently rallying above their 20-day, 50-day, and 200-day moving averages. We searched these companies for those that have seen significant net insider buying over the last 6 months.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.
We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.
Do you think these companies are undervalued? Use this list as a starting-off point for your own analysis.
List sorted by net insider purchases as a percent of share float.
1. Lincoln Educational Services Corporation (NASDAQ:LINC): Education & Training Services Industry. Market cap of $422.47M. PEG at 0.57. Net insider purchases over the last six months at 291.38K, representing 1.38% of the company's 21.19M share float. The stock is trading at 12.24% above its 20-Day SMA, 20.47% above its 50-Day SMA, and 26.72% above its 200-Day SMA. The stock has had a good month, gaining 30.2%.
2. Maiden Holdings, Ltd. (NASDAQ:MHLD): Property & Casualty Insurance Industry. Market cap of $700.19M. PEG at 0.83. Net insider purchases over the last six months at 134.46K, representing 0.27% of the company's 50.62M share float. The stock is trading at 6.32% above its 20-Day SMA, 12.87% above its 50-Day SMA, and 24.78% above its 200-Day SMA. The stock has gained 58.66% over the last year.
3. Zep, Inc. (NYSE:ZEP): Cleaning Products Industry. Market cap of $445.60M. PEG at 0.99. Net insider purchases over the last six months at 5.50K, representing 0.03% of the company's 21.42M share float. The stock is trading at 8.17% above its 20-Day SMA, 9.94% above its 50-Day SMA, and 12.26% above its 200-Day SMA. The stock has had a good month, gaining 12.96%.
*Insider data sourced from Yahoo! Finance, all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.