7 Large And Mid-Cap Stocks With Recent CEO Buys Of At Least $100,000

by: The Keating Letter

There were 23 CEO buys of at least $100,000 since my last update. This article highlights seven of those stocks. These seven are large cap or mid-cap stocks and have heavy trading volume. This upsurge of insider purchasing is a good sign for the markets, especially when we have seen so much volatility lately. Each of these CEOs is displaying confidence in their own company by making these large purchases. As always, use this list as a starting point for research.

Below are seven large and mid-cap stocks with recent CEO buys of at least $100,000. Information is courtesy of www.SECForm4.com.

Northrop Grumman (NYSE:NOC): CEO Wesley Bush reported a 5,000 share purchase on August 23. He had made the purchase four days earlier at an average purchase price of $49.75. The transaction totaled $248,750. Bush’s purchase price is just above the company’s 52 week lows and 30% off its 52 week high. As a defense contractor, Northrop Grumman’s revenue outlook is uncertain while Washington is in a cost-cutting mood. This new austerity even threatens to negatively affect the defense industry. How much of this is already baked into the stock is anyone’s guess. On the plus side, the stock yields 3.8%.

Royal Caribbean Cruises (NYSE:RCL): Royal Caribbean is also near 52 week lows and has risen slightly since CEO Richard Fain’s $1.5 million share purchase. Fain bought 66,000 shares on August 26 at an average price of $22.72. That’s 55% off of 52 week highs. It’s hard to believe that Royal Caribbean shares have dropped nearly 40% in the past month. The company is looking at lower revenue and recently had to make an embarrassing non-cash accounting revision. All of that, along with the general market weakness, affected the stock price. Like Northrop Grumman, it’s hard to know if the stock price has overshot to the downside because of these events. Fain’s purchase is a positive sign, though.

Endo Pharmaceuticals Holdings (NASDAQ:ENDP): CEO David Hoveck bought just under $250,000 worth of company stock on August 25. His average purchase price was $30.30. Endo is a $3.6 billion market cap specialty healthcare solutions company. They have a variety of pain management, oncology, and other products including five generic products. A few well-known investors bought a small number of shares last quarter including Joel Greenblatt, Steven Cohen, and Paul Tudor Jones.

CIT Group (NYSE:CIT): CEO John Thain made a large purchase on August 23. He bought about $1.2 million in shares at an average purchase price of $29.91. Thain caught shares of this business lender just above 52 week lows. Shares have already gone up 11% since Thain’s buy, but are still 33% off of 52 week highs.

Allscripts-Misys Healthcare Solutions (NASDAQ:MDRX): Allscripts reported strong earnings in early August but shares now trade lower than they did after the earnings announcement. CEO Glen Tullman took advantage of the share price weakness by buying 13,500 shares at $14.84 per share on August 22. Allscripts is a $3.3 billion market cap health care solutions company. A number of analysts have price targets for the stock above $20. In their recent earnings call, the company said they would hit the high end of their earnings guidance for this year of around $0.90 per share. Not surprisingly, the stock is trading 17% higher than where it was when Tullman made his buy.

Huntington Bancshares (NASDAQ:HBAN): CEO Stephen Steinour has been making a lot of buys recently. Most recently he bought 21,645 shares on August 19 at an average price of $4.61. The stock of this $4.2 billion market cap bank trades about 10% above its 52 week lows, which it hit last week. Huntington Bancshares yields 3.3%. The stock trades at a Price to Tangible Book ratio of 1. That suggests it has more room to the upside.

AECOM Technology (NYSE:ACM): AECOM is a $2.5 billion market cap “global provider of professional technical and management support services to a broad range of markets, including transportation, facilities, environmental, energy, water and government.” CEO John Dioniso bought 10,000 shares on August 19 at an average price of $19.21. AECOM also announced a $200 million share repurchase program two weeks ago. If that entire amount if utilized the share count could decrease by up to 8%.

Disclosure: I am long NOC.