Insider buying has slowed a bit from the highly elevated levels of the last month. This week we have four companies where the CEO made a purchase of at least $100,000. In three of the cases it seems clear to me that the executives were attempting to demonstrate confidence in their own companies. Those three stocks hit new 52-week lows over the last few weeks and have since bounced off those levels. The overall market has certainly been difficult, but those three companies also have significant challenges from competitors and with their business models. The fourth stock listed here, Bank of South Carolina, is in a different situation, but still an interesting look if you have a small portfolio. It’s a strong bank that pays a solid dividend.
Below are the four stock with recent CEO buys of at least $100,000. Information is courtesy of SECForm4.com.
Monster Worldwide (MWW): Four insiders bought shares on August 30. CEO Salvatore Iannuzzi made the largest buy, picking up 50,000 shares at $8.17 for a total purchase of $408,500. An executive vice president and CFO also picked up at least $100,000 of company stock each. Monster’s stock bounced off 52-week lows of $7 at the end of July. In fact, it went above $10 after the buys, but has fallen back down to the low $8s. That’s a substantial move over a one-week time period. Macroeconomic uncertainty has wreaked havoc with the stock. A new crop of competitors also threaten Monster’s business model, including newly public LinkedIn (LNKD).
Office Depot (ODP): CEO Neil Austrian bought 100,000 shares on August 30 at an average purchase price of $2.52. Austrian owns about 862,000 shares in total. Office Depot is near 52-week lows as well, and is currently about 65% off this year’s highs. Office Depot had big losses in 2008 and 2009 before swinging back to profits in 2010. The last three quarters have again put Office Depot in the red. Staples (SPLS) CEO Ron Sargent thinks there will be consolidation in the sector involving Office Depot. What this means for the stock price remains to be seen.
MBIA (MBI): Like many other mortgage insurance stocks, MBIA has been volatile over the past month. In the beginning of July the stock was north of $10. It then hit a new 52-week low of $5.99 before rebounding to today's mid-$7s level. MBIA is trading at a price to book ratio of 0.8. It reported earnings in early August, which disappointed the markets. MBIA showed a profit of $0.68 per share, but that included one-time and unpredictable gains. CEO Joseph Brown bought 100,000 shares on September 2 at $7.60 per share.
Bank of South Carolina (BKSC): Bank of South Carolina is a tiny $45 million market cap bank. CEO Hugh Lane was indirectly involved in the purchase of 10,815 shares on August 31 at an average price of $9.36. The stock is held in the Beverly Glover Lane Trust, of which Lane is a trustee. It’s unknown if the trust bought at Lane’s direction, but the trust is named for his mother, so chances are he was involved. Either way, the stock is cheap at today’s prices and pays a solid 4.3% dividend.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.