4 Stocks With Recent CFO Open Market Buys

by: The Keating Letter

Each week I highlight CFO purchases of their company shares on the open market. This week’s edition contains three microcaps and one small cap stock. Felcor Lodging had a recent secondary offering that the CFO and other members of management participated in. XOMA and Mackinac Financial are thinly traded microcaps with significant problems. National American University Holdings has seen small, but regular CFO purchases since October.

I like to look at insider buys in order to determine whether they are companies I’d like to do more research on. The size and type of buy, along with some brief details on the company are enough information for me to decide if they’re interesting enough or not to spend more time on. This week’s picks are different than the stocks I typically highlight. If you decide you want to buy into any of these names, I encourage you to do substantially more research.

Below are four stocks with recent CFO buys:

Felcor Lodging Trust (NYSE:FCH): I highlighted Felcor Lodging’s March 29 secondary offering in my recent CEO insider buy article, which you can view here. 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. Seven members of management participated in the offering. CFO Andrew Welch bought 62,060 shares totaling $372.360.

National American University Holdings (NASDAQ:NAUH): I wouldn’t normally highlight a purchase this small, but CFO Richard Shape, who also is the company’s CEO, has been making regular company purchases since October 2010. Since October 29, Shape has purchased 7,364 shares on the open market with his most recent purchase on March 25. Shape owns nearly 150,000 shares in total. National American University is a $181 market cap company that provides adult education services online and at educational facilities.

XOMA Ltd. (NASDAQ:XOMA): XOMA is a small $63 million market cap biopharma. Shares have dropped 40% since March 23 because of a diabetes drug failure. The company had big losses last year and, although they have some prospects with some diseases as well as a royalty stream, they are burning through cash quickly. CFO Fred Kurland took the plunge after the plunge on March 25. He bought 5,000 shares at $3.26. This was the first insider purchase since 2005. It’s hard to believe this stock traded above $250/share in 2001.

Mackinac Financial Corp. (NASDAQ:MFNC): Mackinac Financial is a thinly traded $21 million market cap bank with 11 branch locations in Michigan. CFO Ernie Krueger bought 1,912 shares on March 21. President Kelly George also made a purchase on that date. This stock requires much deeper analysis before buying in. It trades at a P/B ratio of 0.4.

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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