Four Services Stocks Insiders Love Including Western Union

Page 1 of 2

Economic theory posits diversification as one of the key principles on investing. Diversification does not only suggest that an investor should not concentrate their buying on one company or industry, it also suggests that it may be unwise for too much wealth to be invested in the company a person works for; this would leave both income and wealth vulnerable to company-specific shocks. Insider purchases therefore suggest enough confidence in the company to ignore the benefits of diversification, and so it is not surprising that stocks bought by insiders tend to narrowly beat the market (learn more about insider purchases). We track insider purchases for this reason and are particularly interested in stocks that multiple insiders are buying, since these “consensus buys” are even stronger (though, of course, not certain) bullish signals. See our analysis of studies on consensus insider purchases. We have gone through our database of insider trading filings and here are four services stocks that multiple insiders have bought in the last three months:

OMEGA ADVISORS

Multiple insiders have made significant purchases of stock in The Western Union Company (NYSE:WU) in the last three months. The payment services company’s stock is down 26% in the last year as the market suspects that it will be outcompeted by eBay Inc (NASDAQ:EBAY)’s PayPal and other similar services. It trades at 10 times consensus earnings for 2013- and that incorporates sell-side expectations for a decrease in net income- though in the third quarter of 2012 revenue edged up slightly from its levels a year earlier and earnings rose 12%. Billionaire Leon Cooperman’s Omega Advisors reported owning 4.4 million shares of the stock at the end of September (check out Cooperman’s stock picks). We’d also note that Western Union pays a dividend yield of well over 3% and so offers income alongside a potential value play. It would be worth looking into.

Green Dot Corporation (NYSE:GDOT), which is best known for its menu of prepaid debit and gift cards to consumers with limited banking options, is another stock that insiders have been buying. Read our previous coverage on insider purchases in Green Dot. The markets have also been savaging this company, with the stock price falling 53% since a year ago; while revenue was up in Q3 2012 compared to the same period in the previous year, net income was down 20%. This has left Green Dot trading at trailing and 2013 P/E multiples of 11 and 10, respectively. With Wall Street analysts bullish on the company over the next several years, the five-year PEG ratio is 0.6. It’s possible that the market has overreacted to poor business conditions here as well.

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 Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations 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!