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For a starting point on stocks trading near lows, one helpful guide is the buying trends of company insiders. These are members of upper management and the company’s board, and because of their positions they know their companies very well. If their outlook on the company is strong enough to influence their personal investing, it’s a signal to take a second look.

We ran a screen on stocks that appear undervalued relative to earnings growth (with PEG below 1) and undervalued relative to free cash flow (with P/FCF below 15). We screened these stocks for those seeing significant net insider buying over the last six months.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six 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 stocks should be trading higher? 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. American International Group, Inc. (NYSE:AIG): Operates property and casualty insurance networks worldwide and conducts activities in the U.S. life insurance and retirement services industry. Market cap of $38.83B. PEG at 0.27, P/FCF at 8.80. Net insider shares purchased over the last six months at 6.98M, which is 2.88% of the company's 242.37M share float. The stock is currently stuck in a downtrend, trading 17.49% below its SMA20, 20.71% below its SMA50, and 41.01% below its SMA200. It's been a rough couple of days for the stock, losing 12.79% over the last week.

2. Lincoln Educational Services Corporation (NASDAQ:LINC):
Provides career-oriented post-secondary education services in the United States. Market cap of $170.33M. PEG at 0.78, P/FCF at 3.09. Net insider shares purchased over the last six months at 291,380, which is 1.37% of the company's 21.23M share float. The stock is currently stuck in a downtrend, trading 12.22% below its SMA20, 30.2% below its SMA50, and 48.21% below its SMA200. It's been a rough couple of days for the stock, losing 6.11% over the last week.

3. ChinaCast Education Corporation (OTCPK:CAST):
Provides post-secondary education and e-learning services in China. Market cap of $126.39M. PEG at 0.38, P/FCF at 4.14. Net insider shares purchased over the last six months at 317,800, which is 1.02% of the company's 31.25M share float. The stock is a short squeeze candidate, with a short float at 12.25% (equivalent to 22.87 days of average volume). The stock is currently stuck in a downtrend, trading 42.16% below its SMA20, 46.51% below its SMA50, and 58.54% below its SMA200. It's been a rough couple of days for the stock, losing 35.82% over the last week.

4. China Medical Technologies Inc. (CMED): Develops, manufactures, and markets immunodiagnostic and molecular diagnostic products. Market cap of $156.19M. PEG at 0.47, P/FCF at 4.63. Net insider shares purchased over the last six months at 16,700, which is 0.10% of the company's 16.44M share float. The stock is a short squeeze candidate, with a short float at 16.6% (equivalent to 19.89 days of average volume). The stock is currently stuck in a downtrend, trading 8.8% below its SMA20, 17.29% below its SMA50, and 52.26% below its SMA200. It's been a rough couple of days for the stock, losing 7.46% over the last week.

5. NCI, Inc. (NASDAQ:NCIT): Provides information technology (NYSE:IT), engineering, logistics, and professional services and solutions to federal government agencies. Market cap of $151.33M. PEG at 0.81, P/FCF at 8.50. Net insider shares purchased over the last six months at 6,510, which is 0.09% of the company's 6.96M share float. The stock is a short squeeze candidate, with a short float at 5.44% (equivalent to 7.47 days of average volume). The stock is currently stuck in a downtrend, trading 17.17% below its SMA20, 27.47% below its SMA50, and 45.69% below its SMA200. It's been a rough couple of days for the stock, losing 6.94% over the last week.

6. Kohlberg Kravis Roberts & Co. (NYSE:KKR): A private equity and venture capital firm specializing in acquisitions, leveraged buyouts, management buyouts, and mezzanine investments in large cap companies. Market cap of $2.07B. PEG at 0.43, P/FCF at 0.72. Net insider shares purchased over the last six months at 77,400, which is 0.04% of the company's 202.94M share float. The stock is currently stuck in a downtrend, trading 13.33% below its SMA20, 18.95% below its SMA50, and 35.81% below its SMA200. It's been a rough couple of days for the stock, losing 7.81% over the last week.

7. TE Connectivity Ltd. (NYSE:TEL): Provides engineered electronic components, network solutions, specialty products, and subsea telecommunication systems. Market cap of $11.81B. PEG at 0.93, P/FCF at 14.38. Net insider shares purchased over the last six months at 119,500, which is 0.03% of the company's 432.41M share float. The stock has performed poorly over the last month, losing 10.95%.

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.

Source: 7 Insider Buys That Are Undervalued And Near Lows