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 screened for companies where at least one insider made a buy worth over $100,000 filed on August 7 after 4 PM EST. Here are five stocks that I found:
1. Solar Senior Capital (SUNS) invests primarily in leveraged, middle-market companies in the form of senior secured loans, including first lien, unitranche and second lien debt instruments. Solar Senior Capital's investment objective is to maximize current income consistent with the preservation of capital. Solar Senior Capital does this through applying private equity style investing to credit. Solar Senior Capital maintains this investment philosophy through a disciplined approach to rigorous monitoring.
Solar Senior Capital is a closed-end, externally managed investment company that has elected to be treated as business development company under the investment Company Act of 1940 and intends to be taxed as a regulated investment company under Subchapter M of the Internal Revenue Code.
Michael Gross purchased 16,574 shares August 3-7 and currently controls 626,870 shares of the company. Michael Gross has been the chairman of the board of directors, chief executive officer and president of Solar Senior Capital since December 2010.
The company reported the second-quarter financial results on July 31st with the following highlights:
|Earnings per share||$0.38|
|Net Asset Value||$18.54 per share|
|Shares outstanding||9.5 million|
Michael Gross, Chairman and CEO of Solar Senior Capital commented:
"Our second quarter results reflect continued success in leveraging our origination platform to source attractive middle market senior secured loans and to further diversify our portfolio across a broader number of positions and industry groups. The portfolio is 100% performing and the weighted average yield is 8.0% at current fair value. Continued growth in our net investment income allowed us to increase the monthly dividend since quarter end by 15% to 11.5 cents per share. NII per share exceeded dividends paid in the current quarter and year to date. We believe that we are on course to further increase our monthly dividend as we continue to grow the portfolio to our target leverage level."
The stock has a $26 price target from the Point and Figure chart. I believe the target price is achievable during the next 12-24 months.
2. Quest Diagnostics (DGX) is the world's leading provider of diagnostic testing, information and services that patients and doctors need to make better healthcare decisions. The company offers the broadest access to diagnostic testing services through its network of laboratories and patient service centers, and provides interpretive consultation through its extensive medical and scientific staff. Quest Diagnostics is a pioneer in developing innovative new diagnostic tests and advanced healthcare information technology solutions that help improve patient care.
Stephen Rusckowski purchased 5,000 shares on August 7 and currently holds 68,034 shares of the company. Mr. Rusckowski joined Quest Diagnostics on May 1, 2012, and was most recently Chief Executive Officer of Philips Healthcare, the largest unit of Royal Philips Electronics. He was also a member of the Board of Management of Royal Philips Electronics and its Executive Committee.
The company reported the second-quarter financial results on July 19th with the following highlights:
|Net income||$1.11 per share|
For full-year 2012, the company estimates results from continuing operations, before special items, as follows:
- Revenues to grow between 1% and 2%, compared to the prior outlook of between 2% and 2.5%;
- Earnings per diluted share to be between $4.45 and $4.60, unchanged from the prior outlook;
- Operating income as a percentage of revenues to approximate 18%, unchanged from the prior outlook;
- Cash provided by operations to approximate $1.2 billion, unchanged from the prior outlook; and
- Capital expenditures to approximate $200 million, compared to the prior outlook of between $200 million and $225 million.
The stock has a $82 price target from the Point and Figure chart. I believe the price target is achievable during the next 12-24 months.
3. Delta Air Lines (DAL) serves more than 160 million customers each year. With an industry-leading global network, Delta and the Delta Connection carriers offer service to nearly 350 destinations in 65 countries on six continents. Headquartered in Atlanta, Delta employs 80,000 employees worldwide and operates a mainline fleet of more than 700 aircraft. A founding member of the SkyTeam global alliance, Delta participates in the industry's leading trans-Atlantic joint venture with Air France-KLM and Alitalia. Including its worldwide alliance partners, Delta offers customers more than 13,000 daily flights, with hubs in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-LaGuardia, New York-JFK, Paris-Charles de Gaulle, Salt Lake City and Tokyo-Narita.
- Paul Jacobson purchased 50,000 shares on August 6th and currently holds 153,881 shares of the company. Paul Jacobson has been senior vice president and chief financial officer for Delta Air Lines since March 2012.
- Paula Reynolds purchased 10,000 shares on May 2nd and currently holds 47,973 shares of the company. Paula Reynolds serves as a Director of the company.
The company reported the second-quarter financial results on July 25th with the following highlights:
|Net income excluding special items||$0.69 per share|
Richard Anderson, Delta's chief executive officer:
"Moving forward, we expect to have strong profitability in the September quarter with a 10-12% operating margin as we continue to reap the benefits of investments we've made in our operation and customer experience."
The stock has a $21 price target from the Point and Figure chart. I believe the price target is achievable during the next 12-24 months.
4. Blackrock Build America Bond Trust (BBN) seeks high current income with capital appreciation through investments in a portfolio of taxable municipal securities known as Build America Bonds.
Jerrold Harris purchased 6,165 shares on August 6. Jerrold Harris serves as a director of the company.
The fund has a Net Asset Value (NAV) of $23.91 per share.
The stock has had a very impressive run from $15 in 2011 to the current $23 level. I would be looking to be a buyer below the Net Asset Value per share.
5. RCM Technologies (RCMT) is a premier provider of business and technology solutions designed to enhance and maximize the operational performance of its customers through the adaptation and deployment of advanced information technology and engineering services. RCM is an innovative leader in the delivery of these solutions to commercial and government sectors. RCM is also a provider of specialty healthcare services to major health care institutions and educational facilities. RCM's offices are located in major metropolitan centers throughout North America.
Michael O'Connell purchased 21,900 shares August 3-7 and currently controls 1,019,330 shares of the company. Michael O'Connell is a 10% owner of the company, according to SEC filings.
The company reported the first-quarter financial results on May 2nd with the following highlights:
|Net income||$0.08 per share|
On June 29, 2012, the company announced that primarily due to unexpected and extended client procedural delays in awarding certain engagements under an existing contract with a major North American utility, the company's second quarter revenues and operating income will fall short of its expectations. The company anticipates revenues in the range of $35.0 to $36.5 million and operating income in the range of 1.0% to 3.0%. RCM Technologies will announce the second-quarter financial results on August 14.
The stock has a $10.25 price target from the Point and Figure chart. I believe the target price is achievable during the next 12-24 months.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in RCMT over the next 72 hours.