I screened with Open Insider for insider buy transactions filed on October 17. From this list, I chose the top five stocks with insider buying in dollar terms. Here is a look at these five stocks:
1. Tenet Healthcare Corporation (NYSE:THC) is a leading healthcare services company. Through its subsidiaries, Tenet operates 50 hospitals, over 100 free-standing outpatient centers and Conifer Health Solutions, a leader in business process solutions for healthcare providers serving nearly 400 hospital and healthcare entities nationwide. Tenet's hospitals and related healthcare facilities are committed to providing high quality care to patients in the communities they serve. [From Tenet's website]
Glenview Capital Management purchased 433,383 shares on October 15-16 and 3,000,000 shares on September 17. Glenview Capital Management currently controls 13,639,339 shares of Tenet Healthcare Corporation. Tenet Healthcare Corporation has 104.5 million shares outstanding which makes Glenview Capital Management a 13% owner of Tenet.
The company reported the second-quarter financial results on August 7 with the following highlights:
|Net loss||$6 million|
The company's EBITDA guidance for full-year 2012 is $1.313 billion.
The stock has a $43.5 price target from the Point and Figure chart. There have been two insider buy transactions and there have not been any insider sell transactions this year. The stock is trading at a P/E ratio of 42.63 and a forward P/E ratio of 9.20. The company has a book value of $11.29 per share. The 200 day moving average is currently at $21.1 which could act like a support for the stock.
2. Ramtron International Corporation (RMTR), headquartered in Colorado Springs, Colorado, is a fabless semiconductor company that designs, develops and markets specialized semiconductor memory and integrated semiconductor solutions used in a wide range of product applications and markets. [From Ramtron's website]
Cypress Semiconductor Corporation (NASDAQ:CY) purchased 1,975,272 shares on October 15-17 and 647,001 shares on October 10-12 pursuant to a tender offer. Cypress Semiconductor Corporation currently controls 27,580,523 shares of Ramtron International Corporation. Ramtron International Corporation has 35,432,809 shares outstanding, which makes Cypress Semiconductor Corporation a 77.8% owner of Ramtron International Corporation.
On September 19, 2012, Cypress Semiconductor Corporation and Ramtron International Corporation entered into a definitive merger agreement under which Cypress will acquire all outstanding stock of Ramtron at a price of $3.10 per share in cash. The transaction, valued at approximately $109.8 million (excluding assumed debt and options and including shares previously acquired by Cypress), represents a premium of 71% to Ramtron's closing price of $1.81 per share on June 11, 2012, the day before Cypress publicly disclosed its offer for Ramtron. The Boards of Directors of both Cypress and Ramtron have approved the transaction. Ramtron's Board of Directors unanimously recommends that Ramtron stockholders tender their shares in Cypress's increased tender offer.
3. Engility (NYSE:EGL) is a pure-play Government Services contractor providing highly-skilled personnel wherever, whenever they are needed, in a cost effective manner. Headquartered in Chantilly, VA, Engility is a leading provider of systems engineering services, training, program management, and operational support for the U.S. government worldwide, with approximately 8,000 employees worldwide. [From Engility's website]
Abrams Capital Management purchased 50,300 shares on October 15-16, 29,250 shares on September 28, 9,798 shares on September 27 and 100,877 shares on September 24-26. Abrams Capital Management currently controls 2,201,668 shares of Engility. Engility has 16,302,993 shares outstanding which makes Abrams Capital Management a 13.5% owner of Engility.
The company reported the second-quarter financial results on August 13 with the following highlights:
|Net income||$15.0 million|
Based upon operating and business development performance through the second quarter, the company expects its fiscal year 2012 results will be as follows:
|2012 Fiscal Year Outlook|
|Diluted EPS range||$2.30-$2.55|
There have been eight insider buy transactions since the spin-off from L-3 Communications Holdings (NYSE:LLL) on July 17, 2012. There has not been any insider selling since the spin-off. The stock is trading at a forward P/E ratio of 7.38. The stock could be a good pick from the current level.
4. Ascent Capital Group (NASDAQ:ASCMA) is a holding company and owns 100% of its operating subsidiary, Monitronics International, one of the nation's largest, fastest-growing home security alarm monitoring companies, headquartered in Dallas, TX, and certain former subsidiaries of Ascent Media Group. [From Ascent's website]
John Malone purchased 5,000 shares on October 15, 8,200 shares on October 8-9 and 15,000 shares on October 1-3 pursuant to a Rule 10b5-1 trading plan adopted by the reporting person on September 25, 2012.
The company reported the second-quarter financial results on August 8 with the following highlights:
|Net loss||$7.2 million|
Mike Haislip, President and Chief Executive Officer of Monitronics, commented on August 8:
As consumer demand for a 'smart home' continues to grow, our interactive and home automation services remain a compelling offering. Over 50 percent of our new accounts this quarter subscribed to one or more of these advanced services, which positively impacts RMR per subscriber and net revenues. Our strong and consistent operating performance during the first six months of the year and the relative predictability of our business model gives us a tremendous amount of confidence that we will continue to deliver solid results in the second half of 2012.
The stock has a $77 price target from the Point and Figure chart. There have been three insider buy transaction and five insider sell transactions this year. The company has a book value of $37.27 per share. The 200 day moving average is currently at $51 which could act like a support for the stock.
5. Sonus Networks (SONS) helps the world's leading communications service providers and enterprises embrace the next generation of SIP-based solutions, including VoIP, video and Unified Communications through secure, reliable and scalable IP networks. With customers around the globe and 15 years of experience transforming networks to IP, Sonus has enabled service providers to capture and retain users and both service providers and enterprises to generate significant ROI. Sonus products include session border controllers, policy/routing servers, subscriber feature servers and media and signaling gateways. Sonus products are supported by a global services team with experience in design, deployment and maintenance of some of the world's largest and most complex IP networks. [From Sonus' website]
Empire Capital Management purchased 161,668 shares on October 15-16, 40,000 shares on September 6, 113,769 shares on September 4, 296,082 shares on August 30-31, 290,149 shares on August 28-29, 122,421 shares on August 27, 587,579 shares on August 23-24, 413,382 shares on August 20, 415,919 shares on August 16-17, 143,468 shares on August 14 and 428,163 shares on August 10. Empire Capital Management currently holds 37,061,668 shares of Sonus Networks. Sonus Networks has 280 million shares outstanding which makes Empire Capital Management a 13.2% owner of Sonus Networks.
The company reported the second-quarter financial results on August 7, with the following highlights:
|Net loss||$0.04 per share|
|Cash per share||$1.22|
For the third quarter of 2012, management provided the following outlook on a non-GAAP basis:
Total revenue of $51 million to $53 million
SBC total revenue, including maintenance and services, of $17 million to $19 million, up 23% to 37% from the third quarter of 2011
SBC product revenue of $14 million to $16 million, up 35% to 54% from the third quarter of 2011
Gross margins between 58% and 59%
Operating expenses of $39 million to $40 million
Loss per share of $0.03
Basic shares of 280 million
Cash and investments of approximately $300 million, assuming the NET acquisition closes in the third quarter
There have been 18 insider buy transactions and four insider sell transactions this year. The company has a strong cash position of $1.22 per share compared to the current share price of $1.83. I would expect the $1.2 level hold for the stock. Empire Capital Management has purchased 8.5 million shares since May 1.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in EGL over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.