There can be many reasons why insiders might sell their own company's stock: A big personal purchase, such as a house, cash to fund a charity, or many other reasons.
Whichever the case is, insiders usually buy shares because they think the stock is a bargain and has upside potential. When mutual funds or hedge fund managers (and even everyday investors) see a lot of insider activity, it most definitely triggers a reason to take a second look at the company. Recently, the four companies below have seen heavy insider buying.
Genomic Health, Inc. (GHDX) is a molecular diagnostics company focused on the development and global commercialization of genomic-based clinical laboratory services, which analyzes the underlying biology of cancer, allowing physicians and patients to make individualized treatment decisions. The company's Oncotype DX platform utilizes genomic analysis in standard tumor pathology specimens to provide tumor-specific information, or the oncotype of a tumor. The current market price is $30.99, which is at the top of its 52-week price range of $19 - $31. Genomic Health has a market cap of $918.64M and an enterprise value of $818.19M. The current EPS is 0.26 with a trailing P/E of 119.19x and forward P/E of 134.74x. Genomic Health's days sales in receivables of 26.1 is substantially shorter than the Biotech & Medical Research Industry average of 60.3. Oncotype DX sales were $146.6 million in 2009, and $174.5 million in 2010, which represented 34.9% and 19.3% increases over 2008 and 2009, respectively. Genomic Health posted $0.08 vs. $0.06 Q4 EPS on 13% higher total revenue and yet it was still downgraded from buy to hold. For fiscal year 2012, analysts estimate that Genomic Health will earn $0.03. For fiscal year 2013, analysts estimate that Genomic Health's earnings per share will grow by 1167% to $0.38. If this was not intriguing enough news, a director reported buying 155,014 shares on March 5, for $30.01, amounting to roughly $4.6M and also another 91,459 shares at $29.52, totaling another 2.7M. I believe this warrants a second look.
Amicus Therapeutics, Inc. (FOLD) is a biopharmaceutical company focused on the discovery, development and commercialization of orally-administered, small molecule drugs known as pharmacological chaperones. The company's lead product candidate, Amigal (migalastat hydrochloride) for Fabry disease, is in Phase III development. Its other clinical stage product candidates are AT2220 (1-deoxynojirimycin HCl) for Pompe disease, which, as of December 31, 2009, was in Phase I testing and remains on partial clinical hold, and Plicera (afegostat tartrate) for Gaucher disease. The company is conducting preclinical studies in diseases of neurodegeneration, including Parkinson's and Alzheimer's disease. The current market price is $5.73 with a one-year analyst price target of $9. This represents a 57.07% upside potential.
On 02/13/12, the company announced quarterly earnings of -0.25 per share, a positive surprise of 33.0% above the consensus -0.37. Amicus' current quarter consensus estimate has increased over the past 90 days from -0.39 to - 0.36, a rise of 8.5%. For fiscal year 2012, analysts estimate that Amicus will earn $-1.11 and for 2013, analysts estimate that Amicus' earnings per share will grow by 10% to $-1.00. This company has fluctuated from $8.12 to $2.10 in a 52-week period. This stock is extremely volatile (common for a development stage pharmaceutical company), and reacts very well when positive news comes out. There are a lot of hopes for this company to rise if its drugs are approved, but in the meantime the best news is the fact that a director just bought 925,154 shares at $5.70 on March 9 totaling roughly $5.3M.
Cracker Barrel Old Country Store, Inc. (CBRL) is principally engaged in the operation and development of the Cracker Barrel Old Country Store restaurant and retail concept (Cracker Barrel). The current market price is $56.08, and the stock offers a 1.80% dividend yield. Cracker Barrel has a market cap of 1.29B and an enterprise value of $1.77B. The current EPS is $3.52 and for fiscal year 2012, analysts estimate that Cracker Barrel will earn $4.35. For the 1st quarter of fiscal year 2012, Cracker Barrel announced earnings per share of $1.03, representing 24% of the total annual estimate. For fiscal year 2013, analysts estimate that Cracker Barrel's earnings per share will grow by 9% to $4.74. Cracker Barrel's 52-week range is between $37.31 and $59.90.
The 10, 21, 50 and 200 day moving averages are all up, showing a bullish upward trend. Also, perhaps the best news is the fact that an insider reported to have bought 83,856 shares on March 6 at $54.86 amounting to $4.6M.
Corning Incorporated (GLW), incorporated in December 1936, is a technology-based company. The company operates five business segments: Display Technologies, Telecommunications, Environmental Technologies, Specialty Materials and Life Sciences. Corning manufactures and processes products at approximately 60 plants in 13 countries. In October 2010, the company acquired Plaslab S.A.S. On October 1, 2010, the company acquired 49% interest in Quebec Silicon Limited Partnership (Quebec Silicon LP), which is a silicon metal manufacturing company with operations in Canada. In March 2011, the company acquired all outstanding shares from the shareholders of MobileAccess. In December 2011, it acquired Mediatech, Inc. The current market price is $13.29 with a one-year analyst price target of $15.49. This represents a 16.55% upside potential.
Based on Trailing P/E, Corning currently trades at a 62% discount to its Electrical Components & Equipment Industry peers. The current EPS is 1.77 with a P/E of 7.51x. For fiscal year 2012, analysts estimate that Corning will earn $1.37 and for 2013, analysts estimate that Corning's earnings per share will grow by 9% to $1.50. In the past 30 days, this company was upgraded from a three-star to a four-star S&P rating. Corning's inventory rose 32% in 2011, as the company prepared for stronger demand in 2012 and aimed to reduce its supply to better match demand. Corning's effective tax rate has been below average due in to a deferred tax allowance, but this is expected to rise effective this year. Corning flew into my radar once I saw that a director bought 150,000 shares on March 7 at $12.75 amounting to roughly $1.91M. I believe this warrants a second look.