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

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

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

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!