Insider Buying: 5 Stocks With Significant CEO Purchases

by: The Keating Letter

Each week I highlight large purchases made by the CEO on the open market. This week, we have 5 stocks with significant CEO buys. To view last week’s edition, which carried 7 stocks with more than $100,000 of buys, please click here.

Insider buying from management is a better indicator than from directors because managers carry out the day-to-day activities and may portend a catalyst in revenue or earnings. This list should be used to generate ideas for more research. Insider buying by itself shouldn’t be a big enough reason to buy shares. However, if management is bullish on the stock and the fundamentals indicate the stock is cheap or a surprise upside in the numbers may be coming, one of these stocks may be attractive.

The 5 stocks with significant CEO buys are below:

Felcor Lodging Trust (NYSE:FCH): Felcor Lodging had a secondary offering on March 29 for 24 million shares at $6. Members of management participated in the offering, and CEO Richard Smith bought $1.1 million worth of shares. Felcor Lodging is a REIT that owns interests in 83 hotels and resorts in the U.S. and Canada. They’re using the proceeds of the offering to complete the purchase of Fairmont Copley Plaza in Boston. Hedge fund king John Paulson owns about 5% of the company.

Kinder Morgan (NYSE:KMI): CEO Richard Kinder made a $2.98 million buy on March 28. Kinder Morgan has 37,000 miles of pipelines in North America. KMI is the general partner of Kinder Morgan Energy Partners (NYSE:KMP), which is one of the largest master limited partnerships in the U.S. Barclay’s Capital and RBC initiated coverage at overweight and outperform in the past week.

Athersys (NASDAQ:ATHX): Athersys is a small biopharma with a $49 million market cap. Their primary products are focused on a patented stem cell system. CEO Gil Van Bokkelen bought 10,000 shares on March 25 at $2.50 per share. Van Bokkelen owns 205, 032 shares in total.

Western Asset Emerging Markets Income Fund II (NYSE:EDF): EDF is a closed end fund focusing on emerging markets. CEO Peter Wilby bought 2,500 shares on March 24 totaling $57,500. He’s been making purchases every few weeks since January. Wilby owns about 35,000 shares in total.

China TransInfo Technology (NASDAQ:CTFO): CTFO is a Chinese technology company that focuses on transportation planning, toll collection, taxi monitoring and other related applications. CEO Xia Shudong has been buying shares regularly since late February. He made two more purchases on March 22 and March 23. Those two purchases totaled 45,000 shares and $204,300.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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