Insider buying is a very unique indicator of how a company is doing at a certain point in time and where the stock price may be heading. It is a strong vote of confidence, and this is especially true when insiders, including major shareholders, invest large amounts of their own cash. The timing of these purchases to me is the most significant factor here and warrants analysis.
Here are some stocks with significant insider activity during the past 7 days:
Gannett Inc. (GCI) is a media and marketing solutions company, which owns various TV, internet and mobile stations, and includes national brands such as USA TODAY and CareerBuilder. On February 28, Director Howard Elias picked up 8,000 shares at an average price of $14.99. On top of that, in the past month, three other directors in the company have bought shares, ranging from 2,000 to 15,000 shares, at prices generally upward of $15/share. In the past 3 months, shares of GCI have had a nice run-up from $11 to $14.85.
Comerica, Inc (CMA) is a financial services company, providing commercial loans, deposits, cash management, capital market products, international trade finance, foreign exchange management services and loan syndication services. Comerica is currently trading at $29.80 and has a 52-week range of $21.48 -$38.47. Similarly to other banks, CMA is trading below book value, but it has a solid balance sheet and stable historic earnings.
On February 24, Director Turner bought 1,000 shares at $29.46. It is very interesting that up until this time other insiders, such as several Vice Presidents, had only been selling their shares, and at much higher prices. The February 24 purchase by the company director signifies an inflection point for this stock.
Silicon Graphic (SGI) is a technical computing and software company that sells data center infrastructure products purpose-built for large-scale data centers. On February 27, two different directors picked up a total of 6,000 shares at prices between $9.32 and $9.37. In addition, there have been no insider sales reported since 2007. In the past 3 months, shares of SGI have been simply hammered by about 34%. The current stock price is just above the 52-week low of $8.92, and may be a good entry point opportunity.
Invesco Mortgage (IVR) is a hybrid mortgage REIT, since it invests in agency-backed and non-agency-backed residential mortgage securities. IVR is currently trading at $17.23, and has a 52-week range of $12.55 -$24.07. The company is still recovering from a bad hedging strategy in the past, as I detailed in the article "The Meteoric Drop of Invesco's Book Value."
On February 27, CIO John Anzalone bought 3,000 shares at $17.02. In the previous 12 months, all insider trades have been buys at prices ranging from $14.81 to $22.57.
Coca-Cola Co. (KO) is the beverage giant that owns and licenses more than 500 non-alcoholic brands, and is a consistent generator of earnings and dividends for its shareholders. The company is a mainstay in traditional blue-chip portfolios, and is well-liked by Warren Buffet and other gurus. Coca-Cola has low long-term debt at 30% of capital, a P/E of 17.8 and a yield of 2.9%. Earnings are projected to grow by about 8% in the foreseeable future, though the current stock price is close to its 52-week high.
On February 24, Director Daly bought 1,000 shares at an average price of $68.86. However, on the same day a Senior VP sold almost 76,000 shares at a similar price.
American Intl. Group (AIG) is the international insurance organization with presence in more than 130 countries needs no introduction. AIG is currently trading at $29.22, and has a 52-week range of $19.18 -$38.44. The company was recently upgraded by BofA Merrill Lynch:
We are raising our price objective on AIG from $32 to $40 per share. The increase reflects higher assumed multiples for Chartis and SunAmerica. We believe that AIG has the ability to generate substantial excess capital and capital management activities could accelerate materially over the next several years.
On February 27, 15,000 shares were snapped up by one AIG's directors at $28.08. This is the only insider trade in 2012, and it's a significant one in size. Also, at the end of 2011 several gurus, including Mario Gabelli and Donald Smith, have started or added to their AIG positions.