Last week I had eight stocks with CFO buys of at least $40,000. This week the pace has slowed, probably because of all the activity over the past month. It’s obvious that insiders at individual companies don’t hold as dim of a view as market participants. Whether the economy goes into a recession or not, certain companies will still succeed and even thrive. Insider buys from CEOs and CFOs help to highlight the confidence in individual companies. Below are four recent CFO insider buys. Three of these buys were greater than $60,000 and the fourth was for $37,400. Information is courtesy of SECForm4.com.
Monster Worldwide (MWW): Monster had four insider buys on August 30, including from its CEO and CFO. CFO James Langrock bought 12,237 shares at an average price of $8.17 per share. The total transaction was for $99,986. Langrock owns 272,509 shares, most from option grants. That makes this open market purchase more significant. Along with the coordinated buys among Langrock and the other three insiders, it appears they are attempting to signal to the market their confidence in Monster’s stock. My opinion is that Monster has a lot of unpredictable. They’ve got about $1.50 per share of cash and little debt. However, the earnings are volatile and competition is increasing. I don’t think you can extrapolate what they’ll look like going two to three years forward. For that reason, I’m not interested in the stock.
A. Schulman (SHLM): A. Schulman is a $525 million market cap plastics company. They are based in Ohio and cater to the auto and packaging industries. The stock has fallen from the $26 level in early July to a new 52 week low of $16.16 in the last month. The company has guided its earnings downward for the year, but that won’t threaten the strong 3.6% dividend yield. Five insiders have bought shares since that August 25 announcement. CFO Joseph Levanduski bought 5,000 shares on August 29 at an average purchase price of $17.45. Levanduski owns more than 18,000 shares personally and through a trust.
Prospect Capital Corp. (PSEC): CFO Brian Oswald bought 7,000 shares on August 31 for $8.69 per share. This is his second share purchase of the year, previously buying 7,000 shares in late May at a price about 25% higher. Prospect Capital is a mezzanine finance and private equity firm. Shares are yielding nearly 15%. The company also announced on August 25 that it had authorization to buy back up to $100 million in stock.
Plexus (PLXS): Plexus is a $850 million market cap electronic manufacturing services company. The company website is a mish-mash of corporate-speak, which doesn’t give me confidence in the company. When I see the word ideation used by a company, I worry. However, CFO Ginger Jones made a purchase of company stock on August 26. She bought 1,500 shares at an average purchase price of $24.91. I may not know exactly what the company does, but earnings seem to be consistent and the valuation of the stock looks cheap. The P/E is under 10 and the stock trades near 52 week lows.