A major market correction has created much lower stock prices, and many insiders are taking advantage of this opportunity. The amount of insider buying has surged in the last few weeks. When you see insider buying at depressed prices, it often means the shares are oversold and offer great long term value. Some of these stocks look like good investments for the future, while others seem to be better as a short term trading opportunity. While these stocks all look undervalued for long-term investors, traders should wait for dips before considering a buy. I have provided links for each stock which verifies the insider buying filed with the SEC below. Here are the stocks:
Halliburton (HAL) is trading at $36.41. Halliburton is one of the leading oil equipment and service companies. The shares have traded in a range between $27.21 to $57.77 in the past 52 weeks. The 50-day moving average is $35.03 and the 200-day moving average is $43.97. Earnings estimates for Halliburton are at $3.37 per share in 2011, and $4.49 for 2012. The book value is about $12.68. Halliburton pays a dividend of 36 cents per share which gives a yield of 1%. This stock has been volatile and recently traded as low as $32.50, so I would wait for dips to buy. An officer recently bought 2,000 shares, see that here.
Cirrus Logic, Inc., (CRUS) shares are trading at $16.39. Cirrus Logic is a leading maker of specialized semiconductors and is based in Texas. The shares have traded in a range between $12.52 to $25.48 in the past 52 weeks. The 50-day moving average is about $16.14 and the 200-day moving average is $16.72. Earnings estimates for Cirrus are expected to be $1.19 for 2011 and $1.39 for 2012. The book value is $6.04 per share. Cirrus supplies Apple (AAPL) with chips and derives a substantial amount of revenue from them.
This stock has been volatile and is providing many trading opportunities, so it makes sense to wait for dips around $14.50 or below. The CFO recently bought 6,880 shares and a director bought 132,000 shares in October, see that here.
Chelsea Therapeutics (CHTP) is trading around $5.45. Chelsea is a biotechnology company, based in North Carolina. These shares have traded in a range between $3.25 to $8.20 in the last 52 weeks. The 50-day moving average is $4.41 and the 200-day moving average is $4.43. Chelsea is pursuing an orphan drug strategy for a drug called Northera (Droxidopa) which is for the treatment of hypotension. (Yes, that's Hypotension, not hypertension.) This treatment has been approved and marketed in Japan for over 15 years, and generates about $50 million in revenue in that country. The new drug application for Northera could be approved in the first quarter of 2012. That is not long to wait for what could be exceptional gains in this low risk, high potential biotech. This is one of my favorite biotechs, and the chart looks great now too. A director recently bought 45,141, see that here.
Chesapeake Energy (CHK) is trading around $27.81. Chesapeake Energy is a major independent oil and gas company, based in Oklahoma. Chesapeake has several shale plays: Barnett Shale in the Fort Worth Basin of north-central Texas, Haynesville and Bossier Shales in Louisiana and east Texas, Fayetteville Shale in Arkansas, Marcellus Shale in West Virginia, Pennsylvania, and New York and the Eagle Ford Shale in Texas. These shares have traded in a range between $20.97 to $35.95 in the last 52 weeks. The 50-day moving average is $29.02 and the 200-day moving average is $30.54. Chesapeake is estimated to earn about $2.82 per share in 2011, and $2.64 in 2012. The CEO recently bought 11,000 shares and a director recently bought 100,000 shares. You can see the insider buying here.
FXCM, Inc., (FXCM) shares are trading at $9.95. FXCM is a investment brokerage company specializing in foreign currency exchange. The 50-day moving average is $11.75 and the 200-day moving average is $11. These shares have traded in a range between $8.13 to $15.34 in the last 52 weeks. Earnings estimates for FXCM are about 80 cents per share in 2011 and $1.05 for 2012 so the PE ratio is about 11. FXCM pays a dividend of 24 cents per share which is equivalent to a 2.6% yield. These shares are trading at a discount to other investment brokerage companies in terms of PE ratio/valuation. FXCM shares have fallen from about $15 since the beginning of this year, so this is an opportunity to buy at a very attractive price. The COO recently bought over 4,000 shares, see that here.
E*Trade Financial (ETFC) shares are trading at $8.90. E*Trade is a leading discount brokerage firm. The 50-day moving average is $9.46 and the 200-day moving average is $13.11. The shares have traded in a range between $7.74 to $18.13 in the past 52 weeks. E*Trade is estimated to earn about 67 cents per share in 2011, and 75 cents in 2012. Book value is listed at $17.43 per share. This stock has been in a downtrend recently and investors seem disappointed that E*Trade is not going forward with a sale of the company. I would only consider buying this stock on dips. An officer recently bought 6,000 shares, see that here.
The data is sourced from Yahoo Finance and Insidercow.com. The information and data is believed to be accurate, but no guarantees or representations are made. Rougemont is not a registered investment advisor and does not provide specific investment advice. The information contained herein is for informational purposes only.
Disclosure: I am long CHTP.