Aircastle Limited (AYR), Halcon Resources Corp (HK): Insiders Are Spending Millions On These 6 Discounted Stocks

Two key issues have been in play in the stock market as we head into the long Labor Day weekend. Insider buying has been robust in the past month, yet the market has moved steadily downward. The S&P 500 has slid 5% since Aug. 2.

As a result, many recent insider purchases are now “underwater.” That spells opportunity. If these stocks are even cheaper than the levels in which insiders found them to be appealing, then we may witness even deeper insider buying in coming weeks, further validating this “buy” signal. Here’s a look at six examples.

1. Aircastle Limited (NYSE:AYR)
In early June, this aircraft leasing firm agreed to sell a 15% stake in itself to Japan’s Marubeni Corp. The two firms aim to leverage each other’s global transport divisions, cross-selling services and equipment to each other’s customer base.Marubeni began buying shares in subsequent weeks, and by early August, already qualified as an insider as its ownership stake moved above 5%. Throughout the past month, Marubeni has kept on buying, even as shares moved past the $17 mark. Yet in recent days, the market turmoil has pushed shares down close to $16. Look for Marubeni to keep buying until it hits the 15% ownership threshold. Meanwhile, analysts have yet to project the benefits of these two firms’ partnership, as forward earnings estimates have remained largely static over the past 90 days.

 

2. Halcon Resources Corp (NYSE:HK)
Insiders bought more than $2 million of this energy exploration firm in early August as part of a secondary share offering priced at $5.10 a share. In the past 10 days, as shares have slipped below the $5 mark, insiders have continued to accumulate shares. Halcon Resources Corp (NYSE:HK) has a legion of fans in the financial blogosphere, and this recent post typifies the bullish sentiment of some.The company’s strong positioning in the highly productive Utica Shale region is what has them enthused, though Halcon Resources Corp (NYSE:HK)’s oil and gas production in recent quarters has been a bit disappointing. This is now a “show me” stock after that secondary share offering pushed shares down to lows form which they have yet to recover.

 

3. CST Brands Inc (NYSE:CST)
The gas station operator was spun away from parent Valero Energy Corporation (NYSE:VLO) in May, and though shares eventually moved up above $33, they’ve been backsliding recently. A company director thought he spotted value by the time shares fell to $31.55 a share (where he picked up $142,000 in stock). But shares have continued to fall below $30.CST Brands Inc (NYSE:CST)’s newly independent management team aims to spruce up the company’s 1,900 gas stations. It has the resources to make that happen: Valero left CST with more than $400 million in cash to work with.

 

4. Philip Morris International Inc. (NYSE:PM)
After shares of this tobacco giant pulled back from the mid-$90s in the spring to $89 by early August, director Graham Mackay thought he spotted value, plunking down more than $1.1 million of his money to buy shares. He should have waited, as shares have since fallen below $84.

 

5. Swift Energy Company (NYSE:SFY)
Roughly six months ago, I profiled three companies with heavy insider buying.Although shares of Boulder Brands Inc (NASDAQ:BDBD) are up more than 60% since then, Home Loan Servicing Solutions Ltd (NASDAQ:HLSS) has merely treaded water while Swift Energy Company (NYSE:SFY) has continued its downward ascent.Though insiders at Swift Energy Company (NYSE:SFY) loaded up on shares at prices just under $15 in the late winter, Chairman Terry Swift took advantage of a subsequent swoon this summer to buy 20,000 shares at just $11.85 apiece. He could’ve waited a bit longer, as shares are now closer to the $11 mark. Swift has key operations in the highly productive Eagle Ford shale region, and though investors have been spooked by a recent rise in the debt load, the drilling trends are promising.Management notes that compared with a few quarters ago, the Eagle Ford wells are producing higher output at lower cost. “Most of the production impact from this additional activity will be felt in 2014 and will support a lower risk production risk profile in the future,” Terry Swift said on a call with analysts. Will this most recent insider buying finally signal a floor in the stock?

 

6. Calamos Asset Management, Inc (NASDAQ:CLMS)
This asset manager’s founder and CEO, John Calamos Sr., is a bit vexed right now. As I noted six weeks ago, he had been aggressively buying company stock. He kept doing so in late July and early August, buying more than $1 million more in stock at prices in the $10.50 to $10.75 range. Yet the market pullback has pushed this stock down below $10.Calamos is in the process of shifting resources away from poorly performing funds and toward higher-performing ones. Recent signs are promising, though it appears as though the firm’s founder is the only believer in this turnaround thus far.

Risks to Consider: Insiders are notoriously poor market timers, and it is best to profit from their views by having a longer-term time horizon.

Action to Take –> If the market tumbles yet lower, then you’ll need to increase your monitoring of insider activity. Insiders can help investors to see which stocks have been mistakenly dumped when a broad-based rout sets in.

P.S. – As Phillip Morris’ director knows, the tobacco giant is a bargain during its current pullback. That’s because PM is a member of a special group of securities we call “Forever Stocks.” These are world-dominating companies that pay investors a fat dividend, dig a deep moat around their business to fend off competitors and buy back massive amounts of stock, boosting the value for the rest of the shares. They’re stocks solid enough to buy, forget about and hold — forever. To learn more about these stocks — including some of their names and ticker symbols – click here.

- David Sterman
The article Insiders Are Spending Millions On These 6 Discounted Stocks originally appeared on StreetAuthority and is written by David Sterman.
David Sterman does not personally hold positions in any securities mentioned in this article. 
StreetAuthority LLC owns shares of PM in one or more of its “real money” portfolios.

Warren Buffett’s Top 5 Stocks

Buffett’s firm, Berkshire Hathaway, holds dozens of stocks. But these five make up 75% of its portfolio… worth $65 billion. Click here to get Buffett’s top 5 stocks plus his 16 latest buys, FREE.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards in the World

The 10 Most Expensive Cruise Ships in the World

The 10 Fastest Supercomputers in the World

The 10 Best Countries for Doing Business 2015

6 Most Expensive Fruits In The World

10 Worst Airlines in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!