Alcoa, AK Steel, and More Basic Materials Stocks Insiders Love

Page 1 of 2

Insiders should be very hesitant to buy more stock in the company. They already benefit from (or are harmed by) company-specific events, and so the principles of diversification should prevent them from tying more of their wealth to the same business. Actual purchases, then, should signal that the insiders are fairly sure that the stock price will rise. As it turns out, consensus insider purchases- multiple company insiders buying the stock- do tend to precede a stock outperforming the market (see our analysis of studies on insider trading). We looked at our database of insider trading filings and here are five basic materials companies which have had multiple insiders buy the stock in the last three months:

Two insiders have bought shares of Alcoa Inc. (NYSE:AA) since the beginning of 2013, and one of those insiders was also buying in November of last year. Wall Street analysts expect earnings per share to more than double this year after a rough 2012; the aluminum company’s current-year P/E multiple is 10. Their forecasts suggest a slow start to the year before better earnings numbers in the second half of 2013 into 2014. Alcoa’s revenue was down slightly last quarter compared to Q4 2011. Elm Ridge Capital, managed by Ron Gutfleish, owned 4.5 million shares of Alcoa as of its most recent 13F filing (find Gutfleish’s favorite stocks).

AlcoaSeveral insiders have been buying AK Steel Holding Corporation (NYSE:AKS), a producer of steel with a market capitalization of about $450 million (9 million shares are traded on average per day). The stock has fallen 58% in the last year as weak macro conditions have harmed steel demand (the stock’s beta is 2.1, demonstrating the close connection to the broader economy) and the most recent data has 29% of the outstanding shares held short. However, these insiders apparently believe that the company has room for improvement and the current price is only 8 times consensus earnings for 2013. Cliff Asness’s AQR Capital Management added shares in Q3, though the stake was very small for the large hedge fund (check out more stocks Asness was buying).

Three more basic materials stocks insiders have bought:

Page 1 of 2
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 Click to see monthly returns in table format!

Lists

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

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!