Insiders Are Buying Starbucks Corporation (SBUX), Walter Energy, Inc. (WLT), and More

Page 1 of 2

Editor’s Note: Related tickers: Starbucks Corporation (NASDAQ:SBUX), Walter Energy, Inc. (NYSE:WLT), Key Energy Services, Inc. (NYSE:KEG), Kaman Corporation (NYSE:KAMN), LRR Energy LP (NYSE:LRE)

Studies show that stocks bought by insiders narrowly outperform the market (read our analysis of studies on insider trading). Our explanation for this finding is that insiders should avoid buying shares unless they are more confident than usual in the stock’s prospects; otherwise, economic theory suggests that they should prefer to diversify away from the company. Investors can’t imitate every insider purchase, but we think that they can be useful sources of initial ideas for further research if “stocks bought by insiders” is treated similarly to quantitative stock screens. Here are five stocks which insiders have bought recently:

Robert Gates, former U.S. Secretary of Defense, reported buying 3,300 shares of Starbucks Corporation (NASDAQ:SBUX) at an average price of $60.49 per share; Gates had joined Starbucks Corporation (NASDAQ:SBUX)’s Board of Directors about a year ago. In addition to insider activity, we track quarterly 13F filings from hedge funds and other notable investors to help us develop investing strategies (we have found, for example, that the most popular small cap stocks among hedge funds outperform the S&P 500 by 18 percentage points per year). This database also lets us see that in the fourth quarter of 2012, Starbucks Corporation (NASDAQ:SBUX) was one of the most popular restaurant stocks among hedge funds (find more restaurant stocks hedge funds loved). When we last looked at Starbucks Corporation (NASDAQ:SBUX) we acknowledged its impressive growth rates (revenue rose 11% last quarter compared to the first quarter of 2012, with 6% comp sales growth) but noted that the trailing earnings multiple is 32.

Starbucks Corporation (NASDAQ:SBUX)Multiple insiders have been buying Walter Energy, Inc. (NYSE:WLT), a coal company with an emphasis on metallurgical coal (which is used to produce steel). Consensus insider purchases tend to be a somewhat stronger bullish signal than moves by only one insider. The stock has rallied strongly on the news, taking away at least some of any potential gains, but it’s interesting that the insiders are so bullish on met coal; Walter Energy, Inc. (NYSE:WLT), as an example, is down over 60% in the last year as relatively weak global macro conditions have reduced demand for steel. Analysts are forecasting sufficient earnings estimates for a forward P/E of 15, but we are skeptical.

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

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

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

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!