Tracking insider purchases is a fundamental task for any good investor, as it can provide great investment ideas that go beyond usual options. Let’s, thus, take a look at companies that saw their insiders buy their stock this week.
First off is Callon Petroleum Company (NYSE:CPE), a $358 million market cap company engaged in the exploration, development, acquisition and production of oil and natural gas properties. On Apil 7th, Gary Newberry, Senior Vice President at the company´s Operations division, acquired 14,616 shares of the company’s Common Stock, for $8.30 per share. The shares went to his 401(k) Account, which now contains 37,309 shares, valued at more than $326,000.
Despite the fact that the company’s fundamentals do not look good, and growth prospects, just fine, but not great, Mr. Newberry seems bullish about this company. Opinion among analysts is quite divided, although recommendations tend towards a “buy.” In addition, several major hedge funds are betting on this stock. Richard C. Patton´s Courage Capital recently upped its stakes in the company by 50%, to 994,620 shares, and Richard Driehaus´ Driehaus Capital started a position over the last reported quarter, with 455,859 shares. Other prominent investors like Israel Englander, who upped his stakes by 57% lately, also seem to feel bullish about this stock.
The second company in this list is Western Asset Mortgage Capital Corp (NYSE:WMC), a $388 million market cap residential real estate finance company that invests in residential mortgage assets in the United States. Once again, despite weak fundamentals, the company’s President and CEO, Gavin James, seems to feel confident about its future. On April 9th, Mr. James acquired 7,000 shares of Common Stock for $14.54 per share. Following this transaction, the insider owns 28,227 shares of the company, worth roughly $400,000.
I would interpret Mr. James’ purchase as more of an income investment than as a bet on long-term growth. The company pays out more than 18% of the current stock price in the form of quarterly dividends. So, holding this stock is certainly profitable. Moreover, several major hedge funds, like Daniel S. Och‘s Oz Management, Matthew Hulsizer´s Peak6 Capital Management, and D. E. Shaw seem to feel the same way as Mr. James. So, if you are looking for a stock that returns money constantly, this might be your choice.
Disclosure: Javier Hasse holds no position in any stocks mentioned