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 recently. 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. All of these stocks are trading well below the 52 week highs. 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:
Best Buy (BBY) shares are trading at $28.37. Best Buy is a leading retailer of electronics and is based in Minnesota. The 50-day moving average is $26.04 and the 200-day moving average is $28.15. Earnings estimates for BBY are about $3.45 per share in 2011, and $3.90 for 2012 so the PE ratio is only about 8. The book value is stated at $15.23. Best Buy pays a dividend of 64 cents per share which is equivalent to a yield of 2.3%. There has been repeated insider buying and most recently it was a director buying about 347 shares for a transaction value of about $9,400. You can see the insider buying here.
Cliffs Natural Resources (CLF) is trading at $71.28. Cliffs is an iron ore, coal and natural resources company. These shares have traded in a range between $47.31 to $102.84 in the last 52 weeks. The 50-day moving average is $63.54 and the 200-day moving average is $81.13. Cliffs pays a dividend of $1.12 per share which is equivalent to a yield of 1.6%. CLF is estimated to earn $13.38 per share in 2011 and $14.90 in 2012. I would buy this stock on any dips. In terms of PE ratios, this appears to be one of the cheapest stocks in the market. One officer recently bought 150 shares with a value of just over $10,000.
Igo, Inc. (IGOI) is trading around $1.09. Igo is a leading maker of batteries and other electronics equipment. These shares have traded in a range between 60 cents to $5.19 in the last 52 weeks. The 50-day moving average is $1.09 and the 200-day moving average is $1.93. IGOI is estimated to post a small loss in 2011 and earn a small profit for 2012. This is a volatile stock and shorts have taken this stock to very oversold levels recently. The CEO recently bought over 100,000 shares.
Lime Energy (LIME) shares are trading at $3.33. Lime is an energy engineering and consulting company, based in Illinois. These shares have traded in a range between $2.81 to $5.50 in the last 52 weeks. The 50-day moving average is $3.10 and the 200-day moving average is $4.08. Earnings estimates indicate a loss of 2 cents per share for 2011 and a profit of 21 cents for 2012. With energy prices rising, there should be strong demand for companies like Lime that can reduce energy expenses. This company has substantial insider ownership and repeated insider buying. A director recently bought over 3,000 shares, see the insider buying here.
Red Robin Gourmet Burgers, Inc. (RRGB) is trading around $27.88. Red Robin is a gourmet burger restaurant based in Colorado. The 50-day moving average is $25.12 and the 200-day moving average is $29.10. These shares have traded in a range between $19.71 to $39.32 in the last 52 weeks. RRGB is estimated to earn about $1.57 per share in 2011 and $1.91 in 2012. I am not a big fan of restaurant stocks because some of them have very high PE ratios, but Red Robin has pulled back in price and they have a concept that can prosper in tough economic times. If you have never tried Red Robin, you should, and you will see why this company can see continued growth due to higher quality food and friendly service. I would buy this stock on any dips. One director just bought 1,000 shares and another director bought 2,000 shares.
Ferrellgas Partners (FGP) is trading around $22.98. Ferrellgas is a leading distributor of propane fuel products, based in Kansas. These shares have traded in a range between $10.20 to $29 in the last 52 weeks. The 50-day moving average is $21.20 and the 200-day moving average is $22.64. FGP is estimated to earn about 59 cents per share in 2011. Ferrellgas could benefit significantly as the U.S. economy continues to improve. More propane will be used by businesses, and consumers and pricing power should improve for Ferrellgas. Also, FGP pays a generous dividend, $2 per share which is equivalent to a 8.7% yield. An officer recently bought 4,500 shares, see the insider buying here.
Quepasa (QPSA) is trading around $3.89. Quepasa operates a online social network and is based in Florida. The 50-day moving average is $3.83 and the 200-day moving average is $5.96. These shares have traded in a range between $2.74 to $15.45 in the last 52 weeks. Earnings estimates for QPSA are for a loss of 40 cents per share in 2011, and a loss of 4 cents for 2012. Quepasa operates a social network site that has some similarities to Facebook. As the name implies the Quepasa social network primarily appeals to the Latin American community. This stock looks speculative but it could make sense to buy on dips. When Facebook goes public, companies like QPSA are likely to see increased investor interest. A director recently bought 4,000 shares.
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 have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.