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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 in their own companies unless they thought the stock might rise.

I have screened for companies where at least one insider made a buy worth over $100,000 filed this week. Here's a look at the five stocks that I found.

1. For more than a century, the people of Archer Daniels Midland (ADM) have transformed crops into products that serve vital needs. Today, 30,000 ADM employees around the globe convert oilseeds, corn, wheat, and cocoa into products for food, animal feed, industrial, and energy uses. With more than 270 processing plants, 420 crop procurement facilities, and the world's premier crop transportation network, ADM helps connect the harvest to the home in more than 160 countries.

Click to enlarge all images.

Insider Buys

  • Ray Young purchased 4,000 shares on Aug. 3 and currently holds 61,352 shares of the company. Ray Young serves as a senior vice president and CFO of the company.
  • Juan Luciano purchased 3,932 shares on Aug. 2 and currently holds 210,910 shares of the company. Juan Luciano serves as an executive vice president and COO of the company.

Financials

The company reported the financial results for the quarter ended June 30 with the following highlights:

Revenue$22.7 billion
Earnings per share$0.43
Cash$1.5 billion

Outlook

Chairman and CEO Patricia Woertz commented on the outlook:

As we look ahead, while drought has reduced the potential size of the U.S. corn crop, we are tracking the development of other crops in North America and Europe. While U.S. crop carryouts are expected to be low, we have an experienced business team to manage through this environment.

My Analysis

The stock has a $18 price target from the Point and Figure chart. If the target price is reached, I would consider buying the stock.

2. Z Trim Holdings (OTCQB:ZTHO) is an agricultural ingredient technology company that owns existing -- and has developed new -- products and processes to make use of biomass for uses in the food and industrial markets.

The company's food division currently sells a line of products to the food industry that can help food manufacturers reduce their costs and help them solve many production problems. The company's revolutionary technology provides value-added ingredients across virtually all food industry categories.

The company's all-natural products, among other things, help to reduce fat and calories, add fiber, provide shelf-stability, prevent oil migration, and add binding capacity -- all without degrading the taste and texture of the final food products. Perhaps most significantly, Z Trim's products can help extend finished products, and thereby increase its customers' gross margins.

The company's industrial division, opened in 2012, plans to sell eco-friendly ingredients to oil drilling, fracking, petroleum coke, steel/aluminum, paper, and other industries. The company's industrial ingredients are highly functional in applications for adhesives, binders, viscofiers, and emulsifiers.

Insider Buys

Brightline Capital Management purchased 417,612 shares on Aug. 1 and currently controls 80.1% of the company. I believe these shares were purchased through the secondary offering.

Financials

The company reported first-quarter financial results on May 15 with the following highlights:

Cash$0.4 million
Revenue$0.3 million
Net loss$0.4 per share

Outlook

On July 9, 2012, the company announced that in the second quarter of 2012 it recorded its highest second-quarter revenues in company history -- growth of 56% over the second quarter of 2011 and growth of 41% over the first two quarters of 2011.

Steve Cohen, Z Trim CEO, commented:

We plan on continuing to increase our sales volume, quarter over quarter. With our outside manufacturer, Aveka Nutra Processing, set to come on line in the next quarter, we anticipate being able to service an even greater number of customers in the coming months.

My Analysis

The stock has a $5.81 price target from the Point and Figure chart. I believe the target price is achievable during the next 24 months.

3. Angie's List (ANGI) collects consumer reviews on local service providers ranging from home improvement to healthcare in more than 550 service categories. More than one million paying households in the United States rely on Angie's List to help them make the best hiring decisions. Members get unlimited access to local ratings, exclusive discounts, the Angie's List magazine, and help from the Angie's List complaint resolution service.

Insider Buys

Michael Maurer purchased 31,000 shares on Aug. 1 and currently holds 76,461 shares of the company. Michael Maurer was elected to the board of directors in February 2012.

Financials

The company reported second-quarter financial results on July 25 with the following highlights:

Cash$75.6 million
Revenue$36.5 million
Net loss$0.41 per share

Outlook

The company's financial and operating expectations for the third quarter of 2012 are as follows:

  • Total revenue in the range of $40.3 million to $41.3 million.
  • Marketing expense in the range of $26.0 million to $27.0 million.

My Analysis

The stock has a $6.50 price target from the Point and Figure chart. If the target price is reached, I would likely reconsider buying the stock.

4. Opko Health (OPK) is a publicly traded healthcare company involved in the discovery, development, and commercialization of pharmaceutical products, vaccines, and diagnostic products.

Insider Buys

Phillip Frost purchased 100,000 shares on Aug. 2 and currently controls 130,282,900 shares of the company. The company has 297,543,066 shares outstanding, which makes Frost a 43.6% owner of the company. Frost is the CEO and chairman of the company. Frost has been a buyer almost every day this year. His net worth is $2.3 billion as of March 2012.

Financials

The company reported first-quarter financial results on May 10 with the following highlights:

Cash$62.1 million
Net loss per share$0.03
Cash per share$0.21

Upcoming Milestones

  • The company expects to begin marketing its test for Alzheimer's disease in 2013. The company believes that this test could initially be useful in stratifying patients for ongoing clinical trials of potential Alzheimer's drugs, as well as to confirm the diagnosis in a clinical setting and to track the progression of the disease or effectiveness of a therapeutic in a clinical trial.
  • The company has already obtained a CE Mark for its point-of-care diagnostic test for prostate specific antigen (PSA) using its system in Europe, and the company intends to launch the PSA test in Europe in the second half of 2012.
  • In December 2011, the company commenced a multicenter study in the U.S. for the PSA test, which is designed for 510(k) clearance and potential waiver under The Clinical Laboratory Improvement Amendments of 1988. The company intends to submit its application to the Food and Drug Administration for clearance of the PSA test in 2012 and expects to begin marketing the test in the U.S. in 2013.

My Analysis

The company announced today its acquisition of Farmadiet Group Holding, a Barcelona-based company currently engaged in the development, manufacture, marketing, and sale of pharmaceutical, nutraceutical, and veterinary products. The company has several catalyst pending for the remainder of 2012 and 2013.

5. Woodward (WWD) is an independent designer, manufacturer, and service provider of control solutions for the aerospace and energy markets. The company's aerospace systems and components optimize the performance of fixed wing and rotorcraft platforms in commercial, business and military aircraft, ground vehicles, and other equipment. Woodward's energy-related systems and components enhance the performance of industrial gas and steam turbines, reciprocating engines, compressors, wind turbines, electrical grids and other energy-related industrial equipment. The company's innovative fluid energy, combustion control, electrical energy, and motion control systems help customers offer cleaner, more reliable, and more efficient equipment.

Insider Buys

  • Paul Donovan purchased 9,500 shares on Aug. 1-2. Donovan is a director of the company.
  • Gregg Sengstack purchased 2,500 shares on Aug. 2 and currently holds 4,500 shares of the company. Sengstack is a director of the company.

Financials

The company reported the financial results for the quarter ended June 30 with the following highlights:

Revenue$460 million
Earnings per share$0.40
Cash$40 million

Outlook

The company gave the following outlook at its earnings release:

Net sales are expected to be between $1.85 and $1.90 billion for full year fiscal 2012. Fully diluted earnings per share for the full year fiscal 2012 are anticipated to be between $1.90 and $2.00 per share.

My Analysis

I would be looking to be a buyer at the $30 level. The stock has met its Point and Figure price target of $35.

Source: 5 Major Insider Buys Filed This Week