Seeking Alpha
Long/short equity, insider ownership
Profile| Send Message| ()  

I screened with Open Insider for insider buy transactions filed on September 27. I then checked with Finviz if the stocks were trading below Net Asset Value or if the stocks were trading at a forward P/E ratio of less than 15. From this list, I chose the top 4 stocks with insider buying in dollar terms. Here is a look at the top 4 stocks:

1. First Opportunity Fund (OTCQB:FOFI) was incorporated in Maryland on March 3, 1986, as a closed-end management investment company. The fund is non-diversified and its primary investment objective is total return.


(Click to enlarge)

Insider buys

Nicholas Adams purchased 7,700 shares on September 25 and 17,497 shares on September 18. Nicholas Adams currently holds 653,321 shares of the company. Nicholas Adams serves as an Officer of Investment Adviser.

Financials

The fund trades currently at a 23.1% discount to its Net Asset Value. The fund's NAV is currently $9.80 per share.

My analysis

The fund has a $15.75 price target from the Point and Figure chart. There have been steady insider buying by Nicholas Adams and Susan Ciciora this year. There has not been any insider selling this year. I believe the stock is a good pick below the Net Asset Value of $9.80 per share.

2. AGCO Corporation (AGCO), is a global leader focused on the design, manufacture and distribution of agricultural machinery. AGCO supports more productive farming through a full line of tractors, combines, hay tools, sprayers, forage equipment, tillage, implements, grain storage and protein production systems, as well as related replacement parts. AGCO products are sold through four core machinery brands, Challenger, Fendt, Massey Ferguson and Valtra, and are distributed globally through 3,100 independent dealers and distributors in more than 140 countries worldwide. Retail financing is available through AGCO Finance for qualified purchasers. Founded in 1990, AGCO is headquartered in Duluth, Georgia, USA. In 2011, AGCO had net sales of $8.8 billion.


(Click to enlarge)

Insider buys

Mallika Srinivasan purchased 300 shares on September 27, 113,688 shares on September 26, 1,100 shares on September 20, 103,466 shares on September 13, 53,000 shares on September 12 and 61,079 shares on September 11. All these shares were purchased pursuant to a Rule 10b5-1 trading plan. Mallika Srinivasan currently controls 334,772 shares of the company. Mallika Srinivasan serves as a director of the company.

Financials

The company reported the second-quarter financial results on July 26 with the following highlights:

Revenue $2.69 billion
Net income $204.9 million
Cash $393.4 million

Outlook

AGCO is increasing its earnings outlook and targeting adjusted earnings per share in a range from $5.50 to $5.75 for the full year of 2012. The new guidance reflects the company's improved operating performance which is partially offset by the negative impact of currency translation. Net sales are expected to range from $10.1 billion to $10.3 billion for the full year. Gross margin improvement is expected to be partially offset by increased engineering and market expansion expenditures.

My analysis

The stock has a $61 price target from the Point and Figure chart. There have been nine insider buy transactions and four insider sell transactions this year. The stock is trading at a forward P/E ratio of 8.13. The company has a book value of $33.23 per share. I believe the stock could be a good pick from the current level.

3. The Virtus Total Return Fund (DCA) is a diversified closed-end fund with an objective of total return, consisting of both capital appreciation and current income, as determined by the fund's investment adviser, Virtus Investment Advisers, Inc. The fund has been managed since December 9, 2011 by Duff & Phelps Investment Management Co. and Newfleet Asset Management, both affiliated managers of Virtus Investment Partners.


(Click to enlarge)

Insider buys

Thomas Mann purchased 5,000 shares on September 26. Thomas Mann serves as a director of the company.

Financials

The fund is trading at a 11.56% discount to its Net Asset Value. The fund's Net Asset Value was $4.41 per share as of September 27.

My analysis

The stock has a $10.63 price target from the Point and Figure chart. There have been five insider buy transactions and there has not been any insider sell transactions this year. The stock has a 5.35% dividend yield. The stock could be a good pick below the Net Asset Value of $4.41 per share.

4. Smith & Wesson Holding Corporation (SWHC) is a U.S.-based leader in firearm manufacturing and design, delivering a broad portfolio of quality firearms, related products, and training to the global military, law enforcement, and consumer markets. The company's brands include Smith & Wesson, M&P and Thompson/Center Arms. Smith & Wesson facilities are located in Massachusetts and Maine.


(Click to enlarge)

Insider buys

John Furman purchased 1,500 shares on September 25 and currently controls 52,100 shares of the company. John Furman serves as a director of the company.

Financials

The company reported the fiscal 2013 first-quarter, which ended July 31, 2012, financial results on September 6 with the following highlights:

Revenue $136.0 million
Net income $17.8 million
Cash $60.5 million

Outlook

The company expects net sales from continuing operations for the second quarter of fiscal 2013 to be between $130.0 million and $135.0 million, which would represent year-over-year growth from continuing operations in excess of 40.0%. The typical seasonal reduction in second quarter net sales is expected to be less pronounced than in prior years, reflecting the net result of fewer production days partially offset by increases in manufacturing capacity. The company anticipates GAAP earnings per diluted share from continuing operations of between $0.19 and $0.21 for the second quarter of fiscal 2013.

Based on the strength of the company's fiscal 2013 first quarter financial performance and current outlook for the year, the company is raising its full year fiscal 2013 financial guidance. The company now anticipates net sales from continuing operations for fiscal 2013 of between $530.0 million and $540.0 million, which would represent year-over-year growth from continuing operations of approximately 30.0%. The company anticipates fiscal 2013 GAAP earnings per diluted share from continuing operations of between $0.85 and $0.90.

My analysis

The stock has a $20.75 price target from the Point and Figure chart. There have been two insider buy transactions and 14 insider sell transactions this year. The stock is trading at a forward P/E ratio of 11.36. I would expect the rising 200 day moving average currently at $7.25 to act like a support for the stock.

Source: Top 4 Stocks With Insider Buys Filed On September 27 To Consider