Recent studies conducted at InsiderMonkey have revealed that stocks bought by insiders tend to outperform market indexes. Although one must look into other elements, like the company’s fundamentals, valuation and institutional sponsorship in order to make a fine choice, insider purchases can certainly provide some extra safety. Therefore, this is what we will do in this article: we will look into five companies that have seen their insiders purchase their stock, and analyze other essentials in order to help you elucidate if they stand as attractive long-term investment options.
Cyclical Consumer Goods & Services
The Wendy’s Co (NASDAQ:WEN) is a $3.1 billion market cap quick service restaurant operator in the U.S. and several other countries around the world, known for its square-shaped burgers. Although it boasts razor thin margins and returns, and its stock trades at 77.5 times the company’s earnings, one insider seems to feel confident about its future. Last week, on April 15, Scott R. Toop, the firm’s Senior Vice President, General Counsel and Secretary, acquired 10,080 shares of the company – in two separate purchases. He paid $8.37 per share for the first 7,580 shares, and $8.38 per share for the remaining 2,500. Following these transactions, the SVP holds 59,580 shares of the company, worth about half a million dollars.
Another interesting case is that of CONN’S, Inc. (NASDAQ:CONN), a $1.67 billion market cap specialty retailer of branded consumer durable goods, and a provider of consumer credit (oriented at supporting its customers’ purchases). On March 10, Kelly Malson, Board Director, purchased 4,500 shares of the company for an average price of $39.58 per share. Malson currently owns 9,328 shares of the company. In addition, between April 10 and April 14, R. W. Stephens Jr., a large shareholder with a more than 10% stake, acquired 152,746 shares, for prices ranging from $38.87 per share to $39.57 per share. Following these purchases, Mr. Stephens holds (indirectly) 4.45 million shares.
Finally, there’s the Brown Shoe Company, Inc. (NYSE:BWS), a $1.08 billion market cap footwear retailer and wholesaler. The company witnessed one insider purchase recently: Lee W Capps, Board Director, started a position with 1,020 shares, for which he paid $24.90 per share. In addition, the insider holds 2,980 shares indirectly through an Irrevocable Trust.
And Two More Mid-Cap Stocks
American Realty Capital Properties Inc (NASDAQ:ARCP) is a $10.2 billion market cap self-managed and self-administered REIT, focused mainly on commercial real estate. Last Monday, April 21, Edward Weil Jr., Board Director, acquired 7,500 shares of Common Stock for prices around $13.28 per share. He now owns 196,635 shares of Common Stock. In addition to these shares, Mr. Weil directly owns 5,086 shares of Series F Cumulative Redeemable Preferred Stock. A month ago, on March 28, the insider had already bought 10,000 shares of Common Stock for an average price of $13.80 per share.
Also about a month ago, surrounding the announcement of the company beginning to trade ex-dividend (yield is about 7%) on March 28th, following changes in the CEO and CFO positions, several other insiders at American Realty Capital Properties acquired the stock, for prices around $13.78-$13.90 per share.
Oiltanking Partners LP (NYSE:OILT) is another company that has seen several insiders buying its stock, which has already escalated more than 28%. At InsiderMonkey, we have been tracking this company for a while now. In fact, since we recommended this stock on Oct. 2013, and since then the price has risen by 39%.
The most recent transaction occurred on April 15, when Jonathan Ackerman, Vice President and CFO, acquired 600 shares for $78.66 each. Ackerman had started a position with 1,000 shares, which he procured for $70.53 per share, on March 10th. He now owns 1,600 shares of the company.
A week earlier, on April 7, Kenneth Owen, President and CEO, had acquired 1,500 shares of Common Stock for approximately $77.81 per share. Mr. Owen had already purchased 1,500 shares of the company, for $74.34 each, on March 21st. Following these transactions, the insider owns 5,000 shares of the company. On the same day, another insider, David Griffis, Board Director, acquired 64 shares of the company for $78.51 each, and now holds 9,424 Oiltanking Partners shares. Mr. Griffis has been buying this stock every month since Jan. 2012. Since he first started buying, the stock has almost tripled in price. However, the insider activity does not stop here. Anne-Marie Ainsworth, President, Chief Executive Officer and Board Director, on Jan. 6, acquired 1,000 shares at prices ranging from $62.20 to $62.46 per common unit (the weighted average price was at $62.37 per share). Ainsworth now owns 13,000 shares of Oiltanking Partners, valued at more than $992,000.
Disclosure: Javier Hasse holds no position in any stocks mentioned