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
Comments
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

The 10 Largest Pharmaceutical Companies In the World

The 10 Most Expensive Android Apps

The 9 Most Expensive Designer Bags in the World

The 7 Most Expensive Real Estate in the World

The 10 Most Expensive eBay Items Ever Sold

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

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!