While there are many reasons for insiders to sell their shares of a company, there are quite often very few reasons for them to buy shares apart from a positive outlook on the underlying equity. The following companies recently experienced large purchases from officers and directors who have a greater understanding of the company's operations than the typical investor. For those who like to follow leaders who are willing to put their own interests on the line when guided by their conviction, the following companies may prove to be worthy of additional investigation.
Casella Waste Systems Inc. (CWST)
Senior Vice President & Chief Financial Officer Edwin D. Johnson found it ideal to increase his holdings on October 3, 2012. The company officer purchased 25,000 common shares of the company at a price of $4.33 each in a transaction that totals $108,250. Altogether, he now owns 98,194 shares. The filed Form 4 can be found here.
Casella Waste Systems provides waste management services in the northeastern part of the United States. The company operates primarily out of Maine, New Hampshire, Massachusetts, Vermont, New York, and Pennsylvania. The CFO's recent transaction appears even more intriguing given that the company just underwent a public offering to refinance debt and fund acquisitions according to a recent press release. The company priced their offering of 10 million shares at $4 per share, an amount below the CFO's purchase price.
The company now carries a market capitalization of $118 million and a fair enterprise multiple [EV/EBITDA] of 7.16. The company carries significant long-term debt at $473 million while carrying total assets of $634 million. However, much of this is likely due to the nature of the business. The company has not been net income positive for the past year but has been able to maintain steady operations through its operating cash flows.
ANN Inc. (ANN)
Director Daniel W. Yih purchased 5,400 shares of ANN Inc. at $37.02 per share on October 5, 2012. The total transaction amounted to a value of $199,908. Considering the lack of direct insider purchases from within the company for well over the last year, this transaction appears to be a noteworthy development. The details can be found on the company's filed Form 4 found here on the company's website.
ANN Inc. is one of the leading specialty retailers for fashionable women's clothing. Through the leading brands of Ann Taylor and LOFT, Ann Inc markets through 947 stores in 46 states. The company carries a market capitalization of $1.67 billion, a forward P/E of 13.90, a price-to-book ratio of 4.63, and a price to sales ratio of 0.75. As a well known retailer, it remains encouraging to see that the company's net income and top line sales have both been increasing over the past year.
Consolidated Graphics Inc. (CGX)
Chief Financial Officer and Accounting Officer Jon C Biro purchased 7,000 shares of Consolidated Graphics at a purchase price of $25.91. This direct open market transaction found in the Form 4 filed on October 9 can be found here on the company's website. Mr. Biro purchased the shares on October 5 and the transaction totaled an amount of $181,367. Following the purchase, the company officer's interest in the company amounted only to the 7,000 shares purchased.
Consolidated Graphics, Inc. is headquartered in Houston, Texas and operates out of 70 printing businesses across 27 states and throughout the world. The company also has a presence in Toronto, Prague, and a strategic alliance in Asia. Altogether, the company states that its vast technologically advanced web printing capabilities are complemented by the world's largest integrated digital footprint which allows it to optimally fulfill the needs of its customers.
The company trades under a market capitalization of $268 million and carries a forward P/E ratio of 8.61. With a very low price-to-sales ratio of 0.25 and a below average price-to-book ratio of 0.96, the company's current price appears to be undervalued in relation to the listed value off of the company's books. The company's stock price has fallen from a recent high of $55.76 in February 2012 and now trades at less than half of this with a current price of $26.77.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.