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Insider buying is often a sign of potential positive developments within a company, particularly if the insiders who are buying have a good track record with respect to their own buying. This is, however, only a secondary indicator and should not be relied upon solely when making the decision on whether to purchase a security. Insider buying in and by itself will not make a stock move higher, but can provide a further clue if all the other pieces of the puzzle - e.g., earnings, sales, return on equity, profit margins, etc. - are in place.

I screened for companies where at least one insider made a buy filed on August 16. I chose the top five companies with insider buying in dollar terms. Here are the five stocks:

1. Equity One (EQY) is a fully integrated real estate investment trust that is improving retail real estate in urban communities. As of June 30, 2012, the company's consolidated property portfolio comprised 165 properties, totaling approximately 16.8 million square feet of gross leasable area and included 142 shopping centers, 11 development or redevelopment properties, five non-retail properties and seven land parcels. As of June 30, 2012, the company's core portfolio was 91.8% leased and included national, regional and local tenants. Additionally, the company had joint venture interests in 17 shopping centers and two office buildings, totaling approximately 2.8 million square feet of GLA.

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Insider buys

Chaim Katzman purchased 500,000 shares on August 14. The shares were purchased in a private placement. Chaim Katzman has served as the Chairman of Board since the company's formation in 1992 and served as Chief Executive Officer until December 2006 and President until November 2000.

Financials

The company reported the second-quarter financial results on August 1, with the following highlights:

Funds From Operations (FFO)$0.28 per share
Quarterly dividend$0.22 per share
Shares outstanding113.2 million

Outlook

The company updated and raised its guidance for 2012 estimating that Recurring FFO per diluted share will be $1.08 to $1.12 per diluted share as compared to its previous guidance of $1.04 to $1.12 per diluted share.

My analysis

The stock has a $22.5 price target from the Point and Figure chart. The stock is currently trading just $1 shy of that target. The stock has currently a 4.15% dividend yield. I am not currently planning to buy the stock.

2. IMAX Corporation (IMAX) is one of the world's leading entertainment technology companies, specializing in immersive motion picture technologies. The worldwide IMAX theater network is among the most important and successful theatrical distribution platforms for major event Hollywood films around the globe, with IMAX theaters delivering the world's best cinematic presentations using proprietary IMAX, IMAX 3D, and IMAX DMR technology.

Insider buys

Kevin Douglas purchased 300,000 shares on August 14-15, 300,000 shares on August 7-8, 100,000 shares on July 20, 100,000 shares on July 17, 183,600 shares on July 12, and 326,400 shares on July 9. Mr. Douglas controls 9,036,447 shares currently. The company has 68.4 million shares outstanding, which makes Kevin Douglas a 13.2% owner of the company. Mr. Douglas is the founder and chairman of closely-held Douglas Telecommunications, a San Rafael, California-based provider of VoiP telephone services.

My analysis

I wrote an article about IMAX on July 28. The stock has a $43.5 price target from the Point and Figure chart. Kevin Douglas has purchased 1,310,000 shares since July 9.

3. Providence Service Corporation (PRSC) provides home and community based social services and non-emergency transportation services management to government sponsored clients under programs such as welfare, juvenile justice, Medicaid and corrections. Providence is different from many of its competitors in that it provides its social services primarily in the client's own home or in community based settings versus treatment facilities or hospitals and provides its NET management services through local transportation providers rather than owning its own fleet of vehicles. The company provides a range of services through its direct entities to approximately 53,000 clients through 629 active contracts at June 30, 2012, with an approximate 13.6 million individuals eligible to receive the company's non-emergency transportation services. Combined, the company has an approximately $1 billion book of business including managed entities.

Insider buys

Coliseum Capital Management purchased 246,242 shares on August 14-16 and currently holds 1,874,688 shares of the company. The company has 14.8 million shares outstanding, which makes Coliseum Capital Management a 12.8% owner of the company.

Financials

The company reported the second-quarter financial results on August 8, with the following highlights:

Revenue$278.9 million
Earnings per share$0.11
Cash$50.2 million

Outlook

The company has elected to withdraw previously issued earnings guidance for 2012, citing a number of unknowns, including continued and unpredictable start-up costs related to LogistiCare's multiple contract wins, new contract opportunities for the NET segment, new bidding activity in Canada and recent social services wins in a Southwest and Midwest state, along with managed care transitions in a number of states.

My analysis

The stock has met its bearish $10 price target from the Point and Figure chart. The company has a book value of $8.17 per share, which I expect to act like a support for the stock. There have not been any insider sells relating to the stock since January 2011. I am not currently planning to take a position in the stock.

4. Air Transport Services Group (ATSG) is a leading provider of air cargo transportation and related services to domestic and foreign air carriers and other companies that outsource their air cargo lift requirements. Through its principal subsidiaries, including three airlines with separate and distinct U.S. FAA Part 121 Air Carrier certificates, ATSG provides air cargo lift, aircraft leasing, aircraft maintenance services, airport ground services, fuel management, specialized transportation management, and air charter brokerage services.

Insider buys

Willem Mesdag purchased 200,000 shares on August 16, 637,000 shares on August 13-15, 762,695 shares on August 8 and currently controls 11,152,425 shares of the company. The company has 64.4 million shares outstanding, which makes Willem Mesdag a 17.4% owner of the company.

Financials

The company reported the second-quarter financial results on August 2, with the following highlights:

Revenue$153.6 million
Earnings per share$0.17
Cash$47.5 million

Outlook

ATSG's outlook for the second half of 2012 remains positive overall, as revenues, earnings and cash flow (as measured by our Adjusted EBITDA), are all expected to improve compared with the first half of the year.

Joe Hete, President and CEO of ATSG, commented:

"We now expect Adjusted EBITDA from Continuing Operations for 2012 to be approximately $170 million. We will continue to aggressively pursue both cost savings and new business that can yield even stronger results in 2013 and beyond."

My analysis

The stock gapped down from the earnings, but has already recovered the losses. The stock has seen steady insider buying this year from the $4-$5 level. The stock trades currently at a forward P/E of 6.19 and has a book value of $4.53 per share. I would be looking to buy the stock at around the $4 level.

5. Active Network (ACTV) is on a mission to make the world a more active place. With deep expertise in activity and participant management, the company's ActiveWorks cloud technology helps organizations transform and grow their businesses. The company does this through technology solutions that power the world's activities and through online destinations such as Active.com that connect people with the things they love to do. Serving over 50,000 global business customers and driving over 80 million transactions annually, Active Network helps organizations get participants, manage their events and build communities. Active Network is headquartered in San Diego, California and has over 30 offices worldwide.

Insider buys

Bruns Grayson purchased 25,000 shares on August 9. Bruns Grayson serves as a director of the company.

Financials

The company reported the second-quarter financial results on August 2, with the following highlights:

Revenue$121.6 million
Net loss$0.04 per share
Cash$107.8 million

Outlook

For the third quarter of 2012, Active Network is targeting total revenue to be in the range of $108 million to $111 million, up 22% at the midpoint compared to the same period in the prior year. Registrations are expected to grow approximately 13% to 15%, with revenue per registration growth of approximately 2% to 4% compared to the same period in the prior year. The company expects Adjusted EBITDA in the range of $14 million to $16 million. Excluding the impact of business combination accounting rules, Adjusted EBITDA is expected to be in the range of $16 million to $18 million. The company expects a net loss of $8 million to $4 million.

For the full year of 2012, Active Network is tightening its initial guidance range. Total revenue is expected to be in the range of $425 million to $430 million, up 27% at the midpoint compared to the prior year. Adjusted EBITDA is expected to be in the range of $46 million to $48 million. Excluding the impact of business combination accounting rules, Adjusted EBITDA is expected to be in the range of $58.5 million to $60.5 million. The company expects net loss in the range of $38 million to $31 million.

My analysis

The stock has a $6.5 price target from the Point and Figure chart. The company has a book value of $5.77 per share, which I would expect to act like a support for the stock. I would only give a less than 50% chance that we reach the $6.5 level given the revenue growth that the company is experiencing. The stock has seen heavy insider selling since February 2012.

Source: Top 5 Insider Buys Filed On August 16