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 $400,000 filed on August 3rd. Here's a look at the five stocks that I found.
1. Republic Services (RSG) is an industry leader in the U.S. non-hazardous solid waste industry. Through its subsidiaries, Republic's collection companies, transfer stations, recycling centers and landfills focus on providing reliable environmental services and solutions for commercial, industrial, municipal and residential customers. Republic and its employees believe in protecting the planet and applying common sense solutions to customers' waste and recycling challenges.
The company reported the second quarter financial results on July 26th with the following highlights:
|Net income||$0.40 per share|
Republic updated its full year 2012 earnings guidance on July 26th:
Adjusted diluted earnings per share is expected to be in a range of $1.91 to $1.93. This guidance assumes a full year effective tax rate of approximately 36.0%. Adjusted diluted earnings per share excludes a number of charges, other expenses and benefits, as described in the 2012 Updated Financial Guidance section of this document.
The stock has a $42 price target from the Point&Figure chart. I believe the target price is achievable during the next 24 months.
2. PostRock Energy Corporation (PSTR) is engaged in the acquisition, exploration, development, production and transportation of oil and natural gas primarily in the Cherokee Basin of Kansas and Oklahoma. The company owns and operates over 2,800 wells and nearly 2,200 miles of gas gathering lines in the Basin. In addition, it owns 1,100 miles of interstate gas pipelines in Oklahoma, Kansas and Missouri.
The company reported the first quarter financial results on May 10th with the following highlights:
The company received $12 million on August 1st through the secondary offering.
The company has not provided any guidance for 2012.
The stock could warrant a speculative long entry around $1 level. The stock price will most likely follow the natural gas prices. The company will report the second quarter earnings on August 9th.
3. Engility (NYSE: EGL) is a pure-play Government Services contractor providing highly-skilled personnel wherever, whenever they are needed, in a cost effective manner. Headquartered in Chantilly, VA, Engility is a leading provider of systems engineering services, training, program management, and operational support for the U.S. government worldwide, with approximately 9,000 employees worldwide and projected sales of $1.6 billion for 2012.
Financials and outlook
The company estimates sales of $1.6 billion for 2012 and approximately 9,000 employees worldwide. The company has not filed any quarterly financial reports yet.
4. Vitesse Semiconductor (VTSS.PK) designs, develops and markets a diverse portfolio of high-performance, cost-competitive semiconductor solutions for Carrier and Enterprise networks worldwide. Engineering excellence and dedicated customer service distinguish Vitesse as an industry leader in high-performance Ethernet LAN, WAN, and RAN, Ethernet-over-SONET/SDH, Optical Transport, and best-in-class Signal Integrity and Physical Layer products for Ethernet, Fibre Channel, Serial Attached SCSI, InfiniBand, Video, and PCI Express applications.
William Martin purchased 264,500 shares on August 1st-2nd and currently controls 3,491,127 shares of the company. The company has 25 million shares outstanding which makes William Martin a 14% owner of the company.
The company reported the second quarter (ending March 31st) financial results with the following highlights:
|Net loss||$0.25 per share|
For the third quarter of fiscal year 2012, ending June 30, 2012, Vitesse expects revenues to be in the range of $28.5 million to $31.5 million and product margins are expected to be between 56% and 58%. Operating expenses are expected to be between $17.5 million and $18.5 million.
The stock is currently trading at new 52 -week lows. The company will report the third quarter financial results on August 7th. I would recommend waiting for the earnings before taking a position in the stock.
5. General Electric (GE) works on things that matter. The best people and the best technologies taking on the toughest challenges. Finding solutions in energy, health and home, transportation and finance. Building, powering, moving and curing the world. Not just imagining. Doing. GE works.
|Earnings||$0.29 per share|
GE Chairman and CEO Jeff Immelt commented the outlook at the second quarter earnings call:
And now to the operating framework, we want to confirm our operating framework for the year. We expect industrial earnings to grow double-digits. Energy is going to have a very strong second half, and margins will be positive in the third quarter and for the year. Capital earnings will grow double-digits, commercial real estate has improved dramatically and Europe is manageable.
Our corporate is on track and we will offset any gains with restructuring. Cash expectations are being revised upward because of the capital dividend and pension change. We now expect 17 to $19 billion of CFOA for the year. Organic industrial revenue growth should continue to expand 5 to 10% and we will continue to shrink GE Capital. So, we have a very solid outlook for 2012 and good momentum as we (inaudible) for 2013.
Finally, I think there is a lot of positive news reports for investors, we have a solid industrial outlook, we have a big backlog and margin performance, is on track, for the expansion we communicated at EPG, we are getting cash from GE Capital and we will continue to position to be a smaller more valuable franchise. We have a lot of cash, we plan to use the $4.5 billion capital special dividend to buyback additional stock, and those efforts will accelerate in the third quarter. Meanwhile, we will continue to grow the GE dividend line with earnings.So, in a volatile environment, GE is positioned for double-digit earnings growth and valuable capital allocation. And this is a powerful combination for investors.
The stock has a $23.5 price target from the Point&Figure chart. I believe the target price is achievable during the next 6-12 months.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in VTSS.PK over the next 72 hours.