6 Month Insider Buy Follow-Up: How The 14 Stocks Did Six Months Later

by: The Keating Letter

Last week I put up an article following up the insider CEO and CFO buys I had highlighted six months earlier. The results were not great. This week I’ll again look at the CEO and CFO buys from six months ago. On February 24 I highlighted nine CEO buys and on February 25 I highlighted six CFO buys. Both the CEO and CFO bought shares for Two Harbors. To compare, the S&P 500 was down 9.7% over the last six months. Let’s see how those buys did relative to the market.

For the CEO buys we had six stocks do better than the S&P 500 and three do worse. That’s a good ratio, especially when the stock that was way up was a relatively safe play, while the one stock that was way down was risky.

Lorillard (NYSE:LO): Lorillard was a big winner. Shares were up 46% over the past six months as the company worked its way through a regulatory threat that didn’t fully materialize. Shares still yield 4.7%.

American Water Works Company (NYSE:AWK): Shares were up 4.2% over this time period. This one also is a good dividend play at 3.3%.

Cherokee (NASDAQ:CHKE): Cherokee was the first loser, down 15% from February 24 to August 23. Shares seem to be cheap, though, and the stock yields a smooth 5.6%.

NetSol Technologies (NASDAQ:NTWK): This was another loser, down 54%. Unfortunately this microcap doesn’t pay a dividend and it’s difficult to put a value on the stock.

Datawatch (NASDAQ:DWCH): Shares rose 1% over the last six months. Datawatch is another tiny company, but it was a safe place to hide out since the last update.

PennyMac Mortgage Investment Trust (NYSE:PMT): Pennymac shares were down 4.9% over the last six months, beating the S&P 500 , but still failing to provide returns. For a little more information on the REIT, read Frank Voisin’s piece: PennyMac Mortgage: Asymmetrical Compensation.

Two Harbors Investment (NYSE:TWO): Shares were down 6.4% over the last six months. Again, failing to beat the market but still providing some safety. The CEO and CFO have made multiple buys since the beginning of the year. The big yield continues to make it an attractive stock. The CFO had also bought shares at the same time as the CEO.

Coca-Cola Enterprises (NYSE:CCE): Shares rose 6.9% since February 24. The company announced decent earnings at the end of July and shares seem to be slightly undervalued.

Chimera Investment Corp. (NYSE:CIM): Shares were disappointingly down 21.5% over the last six months. The dividend here is 15%.

For the CFO buys, including the Two Harbors CFO buys, four of these CFO buys beat the market and two trailed. Even so, only one of the CFO buy stocks were positive. Here were the results:

OmniAmerican Bancorp (NASDAQ:OABC): Shares were down 8.1% since February 24. That beat the market, but still isn’t very satisfying. However, shares do trade at a very attractive price to book ratio of 0.8.

Rex Energy Corp. (NASDAQ:REXX): Shares of this $504 million market cap driller were down 7.6% over the last six months. CFO Thomas Stabley has done better, though, since he bought at $11.50 per share.

Innospec (NASDAQ:IOSP): Innospec shares are down 10.3% since the last report. At the time of CFO Ian Cleminson’s buy the stock was near 52 week highs. It kept going up until the three weeks or so, as the entire market has been pummeled. Shares are very attractively priced right now.

UGI Corp. (NYSE:UGI): Shares are down 10.5% over the last six months. Shares yield 3.8%. They’ve bounced off 52 week lows over the last few weeks and, like Innospec, trade at attractive prices.

Pacira Pharmaceuticals (NASDAQ:PCRX): This winner returned 29.2% over the last six months. For a time it was an even bigger winner. At one point over the last six months shares traded 123% higher than the February 24 price until they dropped since late May. Even with the drop, the stock is way up since the February 2 IPO.

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