In the United States and several other jurisdictions, trading conducted by corporate officers, key employees, directors, or significant shareholders (in the U.S. defined as beneficial owners of 10% or more of the firm's equity securities) must be reported to the regulator or publicly disclosed, usually within a few business days of the trade. Many investors follow the summaries of these insider trades in the hope that mimicking these trades will be profitable. While "legal" insider trading cannot be based on material non-public information, some investors believe corporate insiders nonetheless may have better insights into the health of a corporation (broadly speaking) and that their trades otherwise convey important information (e.g., about the pending retirement of an important officer selling shares, greater commitment to the corporation by officers purchasing shares, etc.).
Executives and directors have the most up-to-date information on their companies' prospects. Intimately acquainted with cyclical trends, order flow, supply and production bottlenecks, costs and other key ingredients of business success, these insiders are way ahead of analysts and portfolio managers, not to mention individual investors. Insiders' decisions - legal or not - to trade in their own companies' stocks are certainly worth examining. So, in the next article I will write about three companies that insiders bought this week and deserve to be considered.
J. Alexander's Corporation (NASDAQ:JAX)
Insiders have started to snap up shares in J. Alexander's Corporation. This company operates casual dining restaurants in the United States. The company's restaurants offer American menu. As of March 16, 2012, it operated 33 J. Alexanders restaurants in Alabama, Arizona, Colorado, Florida, Georgia, Illinois, Kansas, Kentucky, Louisiana, Michigan, Ohio, Tennessee, and Texas. J. Alexanders Corporation was founded in 1970 and is headquartered in Nashville, Tennessee.
J. Alexander's Corporation has a market cap of $86.81 Million and an enterprise value of $92 Million. Its trailing P/E is 38.08, and its forward P/E is just incalculable. J. Alexander's Corporation's estimated growth rate for this year is -69.85%. It has a total cash position on its balance sheet of just $12.81 Million, and its total debt is at $17.93 Million. So, its total debt/equity is just 34.07.
Fidelity National Financial Inc., 10% owner, has just bought 346,105 shares, or $5.01 million worth of stock, at $14.50 per share. The shares are held by New Athena Merger Sub, Inc. ("New Athena"). New Athena is an indirect, wholly-owned subsidiary of Parent and a direct, wholly-owned subsidiary of Fidelity National Special Opportunities, Inc. ("FNSO"). FNSO is a wholly-owned subsidiary of Parent. The shares may also be deemed to be indirectly beneficially owned by Parent and FNSO.
From a technical standpoint, this stock is currently trading above both its 50-day and 200-day moving averages, which is bullish. The stock bounced to its price of $6 in March. If you are bullish on this stock, I would look to be a buyer on the next high-volume move above some near-term overhead resistance at $14.52 a share. Look for volume that's tracking in close to or above its three-month average action of 52,247 shares.
Republic Services Inc. (NYSE:RSG)
Another stock whose insiders are very active is Republic Services Inc. This company provides non-hazardous solid waste collection, transfer, and disposal services for commercial, industrial, municipal, and residential customers in the United States and Puerto Rico. Its residential collection operations comprise the curbside collection of refuse from small containers into collection vehicles for transport to transfer stations or directly to landfills; and commercial and industrial collection operations include supplying waste containers, renting compactors to large waste generators, and collecting and transporting containers or compacted waste to landfills or transfer station for disposal.
Republic Services has a market cap of $10.05 Billion and an enterprise value of $17.03 Billion. This stock trades at a cheap valuation. Its trailing P/E is 15.12, and its forward P/E is just 13.35. Republic Services' estimated growth rate for this year is 18.64%. It has a total cash position on its balance sheet of just $69.30 Million, and its total debt is at $7.11 Billion. So, its total debt/equity is just 92.59.
Cascade Investment LLC, 10% owner, has just bought 1,200,773 shares, or $32.82 million worth of stock, at $27.34 per share.
From a technical standpoint, this stock is currently trading under both its 50-day and 200-day moving averages, which is bearish. This stock plunged from its May high of $30 to a recent low in June of $25. After hitting that low, the stock bounced to its current price of $27.51. If you are bullish on this stock, I would look to be a buyer on the next high-volume move above some near-term overhead resistance at $27.71 a share. Look for volume that's tracking in close to or above its three-month average action of 2,424,690 shares.
Hudson Global Inc. (NASDAQ:HSON)
Insiders have started to buy shares in Hudson Global Inc. This company provides specialized professional-level recruitment and related talent solutions worldwide. The company provides permanent recruitment services; and contract consulting services, including project management, interim management, and professional contract staffing services. It also offers legal eDiscovery services, such as eDiscovery solutions, which provide information management solutions for transaction and regulatory actions; managed document review comprising logistical deployment, project management, process design and productivity management.
Hudson Global has a market cap of $142.58 Million and an enterprise value of $119.94 Million. Its trailing P/E is 17.15, and its forward P/E is just 37.17. Hudson Global estimated growth rate for this year is 329.83%. It has a total cash position on its balance sheet of just $28.93 Million, and its total debt is at $2.47 Million. So, its total debt/equity is just 2.31.
Sagard Capital Partners, L.P., 10% owner, has just bought 35,000 shares, or $158k worth of stock, at $4.53 per share. Sagard is the direct beneficial owner of the reported Shares. GP and Sagard Management are indirect beneficial owners of such reported Shares. Each of the Reporting Persons disclaims beneficial ownership (as defined in Rule 16a-1(a)(2)) of the securities reported herein except to the extent of its pecuniary interest therein.
From a technical standpoint, this stock is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock plunged from its April high of $5.98 to a recent low in June of $3.20. After hitting that low, the stock bounced to its current price of $4.46. If you are bullish on this stock, I would look to be a buyer on the next high-volume move above some near-term overhead resistance at $4.63 a share. Look for volume that's tracking in close to or above its three-month average action of 64,280 shares.
*Chart data sourced from finviz.com, all other data sourced from yahoo.com as well as the webs of the previously mentioned companies.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Investors buy and/or sell at their own risk. I declare that I may day-trade any stock at any time mentioned in this article. For me "long" is until I sell and few tell you that. I do not "short" stocks and few tell you that too. I also get paid one penny per view from SA and other than being published by SA and my own private stock account, I have zero connection to Wall Street and few tell you that too.