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 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. Insider buying should be monitored very closely for developmental-stage companies.
Here are some stocks with significant insider buying activity during the past 7 days:
Paramount Gold & Silver (PZG) is a precious metals mining company, with holdings in Nevada and Mexico. On April 20, one of its Directors picked up 20,000 shares at an average price of $2.29. On the same day, the company's CEO bought 15,000 shares at a similar price. The stock price is up over 3% since then.
On March 30, 2012, Paramount announced that it has closed its previously announced non-brokered private placement funding of common stock. The company sold 10,417,776 shares of common stock at $2.05 per share, for proceeds of $21,356,441. No warrants were issued in connection with this transaction. It is also interesting that on March 30, FCMI Financial - a large shareholder - purchased over 1.1 million shares.
Universal Stainless & Alloy (USAP) manufactures and markets semi-finished and finished specialty steel products, including stainless steel, tool steel and certain other alloyed steels. The Company's products are sold to rerollers, forgers, service centers, original equipment manufacturers (OEMs) and wire redrawers.
On April 20, Pennant Capital Management bought over $2.7 million worth of stock at an average of $43.94 per share. In addition, Pennant has been increasing its position in the company throughout April via two other transactions totaling approximately 52,000 shares.
Opko Health (OPK) is a multi-national pharmaceutical and diagnostics company. It develops solutions to diagnose, treat and prevent various conditions, including molecular diagnostics tests, point-of-care tests, and pharmaceuticals and vaccines. Its lead program is a molecular diagnostics platform for the development and commercialization of blood-based tests for conditions.
Throughout April 2012, company director and major shareholder Dr. Frost picked up a total of 560,000 shares at prices between $4.40 and $4.87. This represented 10 different transactions during the month. OPK is currently at $4.90, well below its 52-week high of $5.85. The stock finally swung to profitability in its latest quarter and may be a good one to watch.
Cracker Barrel (CBRL) operates a chain of restaurants and stores located in 42 states. CBRL is currently trading at $56.43, and has a 52-week range of $37.31 -$59.90. The stock pays a decent dividend of 1.8% and has a share repurchase program in place.
During the past two months Sardar Biglari bought over 440,000 shares at prices ranging from $54.64 to $56.26, or all below the current market price.
Willbros Group (WG) serves the oil and gas, refinery, petrochemical and power industries, and specializes in designing, constructing, upgrading and repairing midstream infrastructure, such as pipelines, compressor stations and related facilities for onshore and coastal locations as well as downstream facilities, such as refineries.
On April 16, a Senior VP bought 10,000 shares at an average price of $3.95. The stock is up 17% since then. Various other insiders purchased similar amounts of shares at the end of 2011.
The Mosaic Co. (MOS) - is a producer and marketer of concentrated phosphate and potash crop nutrients for the global agriculture industry. It is a supplier of phosphate- and potash-based crop nutrients and animal feed ingredients. MOS is currently trading at $50.40, and has a 52-week range of $44.86 -$77.48. The company recently announced a 150% dividend increase, but is still facing the prospects of rather sluggish potash sales.
On April 16, two different directors bought a total of 11,000 shares at $50.25. Prior to these two transactions, insiders were mostly sellers the stock, especially in 2011.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.