Many insiders in a wide variety of industries from glass and aluminum makers to retailers, are finding compelling values and making large stock purchases.
Insider buying can provide great insight into where a stock might be heading. Insiders usually know their companies better than the average investor or stock analyst, so when they use their own money to buy shares, it can be very meaningful. Some of these stocks are near the lows for the past year, and look like great buying opportunities. I have provided links for each stock, which verifies the insider buying filed with the SEC below. Here are some stocks with strong insider buying in 2012:
Owens-Illinois (OI) shares are trading at $21.99. This company is a leading maker of glass products including containers for beer, juice wine and other beverage. The 50-day moving average is $19.66 and the 200-day moving average is $22.93. The 52-week range is $13.43 to $33.32. Earnings estimates for Owens-Illinois are at $2.37 per share in 2011 and $2.82 This stock went down to about $14 in October, but has been rising since. A move from about $14 to nearly $22 in just months is a huge run, so I would not chase it here. However, the stock appears undervalued on dips below $20 per share. On January 11, 2012, an insider reported buying 1,000 shares.
Alcoa Inc. (AA) is trading at about $9.80. Alcoa is a leading producer of aluminum products. These shares have a 52-week range of $8.45 and $18.47. The 50-day moving average is $9.56 and the 200-day moving average is $12.89, so the shares are trading well below these key support levels. Book value is stated at $13.97 per share. Earnings estimates indicate a profit of 62 cents per share for 2011 and 98 cents for 2012. AA pays a dividend of 12 cents per share, which is equivalent to a 1.2% yield. A few days ago, Alcoa reported earnings and that led to a dip in the share price. I think this stock makes sense as a trade if you buy on dips, but Alcoa as a buy and hold investment is not likely to perform until the economy sees a major rebound. On January 11, 2012, an insider reported buying 1,985 shares.
Commercial Metals Company (CMC) shares are trading at $13.22. This company makes a variety of steel and metal products, and is based in Texas. CMC shares have traded in a range between $8.64 to $18.20 in the last 52 weeks. The 50-day moving average is $13.63 and the 200-day moving average is $13.29. Earnings estimates are for a profit of $1.08 per share for 2011 and $1.75 for 2012. A dividend of 48 cents per year is paid, which is equivalent to a 3.6% yield. The stock appears undervalued with a solid dividend payout and a book value of $10.23. Carl Icahn had offered to buy Commercial Metals, but recently called off the bid. The stock has since fallen to more attractive levels for bargain hunters. On January 11, 2012, a director reported buying 2,000 shares.
Sears Holdings Corporation (SHLD) is trading around $33.56. Sears
Holdings is a leading retailer of a wide variety of goods ranging from clothing to appliances. The 50-day moving average is $53.39 and the 200-day moving average is $65.14. These shares have traded in a range between $28.89 to $94.79 in the last 52 weeks. Earnings estimates indicate a loss of $5.10 per share for 2011 and another loss of $4.86 for 2012. Eddie Lampert runs ESL Partners and this investment company has been a significant buyer of Sears stock over the years. The problem is that Sears has continued to post poor operating results and the stock has seen a sharp decline. Even though ESL Partners seems to have confidence in a turnaround, I would avoid this stock. On January 11, 2012, an insider (ESL Partners) purchased over 4 million shares.
Dycom Industries, Inc, (DY) is trading around $21.25. Dycom is a construction and engineering company that specializes in tower construction, transmission lines, antenna installation, and other related services. These shares have traded in a range between $12.26 to $22.72 in the last 52 weeks. The 50-day moving average is $20.13 and the 200-day moving average is $17.12. Dycom is estimated to earn $1.04 cents per share in 2011, and $1.33 in 2012. This company has a strong balance sheet and a book value of $10.94 per share. Dycom shares are trading near the 52-week high, so I would let the stock pull back before considering a buy. A number of insiders have been buying the stock recently. One insider reported purchasing 2,600 shares on January 9, 2012.
Data sourced from Yahoo Finance and Insidercow.com. The information and data are believed to be accurate, but no guarantees or representations are made.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Disclaimer: Rougemont is not a registered investment advisor and does not provide specific investment advice. The information contained herein is for informational purposes only.