2 Major Insider Buys Filed On July 26th

Includes: DOLE, FSYS
by: Markus Aarnio

When insiders buy shares on the open market, their companies are usually undervalued. Corporate insiders often have the inside track on their companies' prospects. Insiders probably wouldn't risk investing too much of their own money into their own companies unless they thought the stock might rise.

I screened for companies where at least one insider made an insider buy worth over $450,000 million filed on July 26th. Here are two stocks that I found:

1. Dole Food Company (DOLE) engages in sourcing, growing, processing, marketing, and distributing fresh fruits and vegetables, and food products to wholesale, retail, and institutional customers worldwide. It operates in three segments: Fresh Fruit, Fresh Vegetables, and Packaged Foods.

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Insider buys

David Murdock purchased 278,800 shares on July 24-25th. Mr. Murdock has beneficial ownership of an aggregate of 51,988,800 shares or 58.4% of the company's stock. Mr. Murdock, 86, joined Dole as Chairman of the Board and Chief Executive Officer in July 1985.


The company reported second quarter results on July 19th with the following highlights:

Revenue $1.7 billion
Earnings per share $0.73
Cash $94.7 million

David A. DeLorenzo, Dole's President and CEO on company's strategic review during second quarter earnings announcement:

"We are continuing to look at a wide variety of potential alternatives as part of the strategic review of our businesses," DeLorenzo continued. "As part of this review, we are exploring transactions that may include a full or partial separation of one or more of our businesses through a spin-off or other capital markets transaction, as well as joint venture and sale transactions, all of which are aimed at enhancing shareholder value. This review continues to be a company priority in our efforts to enhance shareholder value."

My analysis

The stock has a $15 price target from the Point&Figure chart. I believe the target price is achievable during next 6-12 months.

2. Fuel Systems Solutions (FSYS) is a leading designer, manufacturer and supplier of proven, cost-effective alternative fuel components and systems for use in transportation and industrial applications. Fuel Systems' components and systems control the pressure and flow of gaseous alternative fuels, such as propane and natural gas, used in internal combustion engines. These components and systems feature the company's advanced fuel system technologies, which improve efficiency, enhance power output and reduce emissions by electronically sensing and regulating the proper proportion of fuel and air required by the internal combustion engine. In addition to the components and systems, the company provides engineering and systems integration services to address unique customer requirements for performance, durability and configuration.

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Insider buys

Kevin Douglas purchased 30,200 shares on July 24th and 69,800 shares during July 19th - July 23th. Kevin Douglas is a 10% owner of the company according to SEC filings.


The company reported first quarter results on May 3rd with the following highlights:

Net loss $0.06 per share
Cash $75 million
Market cap $309 million

Company outlook

The company gave the following outlook at its first quarter earnings report:

The company continues to expect growth in European aftermarket products in particular in Italy, Poland and Turkey. The price differential of alternative fuels compared to traditional fuels is expected to continue to act as a very strong catalyst in particular in the European region. Revenue contributions are expected from OEM programs planned to begin to roll out in the second half of the year in Asian countries such as Thailand, China and India, as well as in certain Latin American automotive markets. Modest gross and operating margin expansion continues to be expected from changes in revenue mix and some operating leverage through cost control. Visibility with respect to the still-developing alternative fuel US automotive market will remain low until later in the year when scheduled models launch, with the bulk of revenue and margin contribution expected to be delivered in the second half of 2012.

The company will report second quarter earnings on August 8th.

My analysis

The stock has a $11.5 price target from the Point&Figure chart. I will probably wait till the second quarter earnings before taking a position in the stock.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in DOLE over the next 72 hours.

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