Insiders Bought These Stocks Recently

Insider PurchasesStudies show that insider purchases tend to be bullish signs for a stock (read our discussion of studies on insider trading). This is generally accepted to be because insiders would prefer to diversify their investments and only invest in their company’s stock when they are very confident in its future prospects. Because of the signal that these purchases can make, we track insider purchases as well as sales so that investors can review these stocks further and see if any particular one might be a good investment for them as well. Here are five stocks that insiders have been buying recently:

The CEO of Bruker Corporation (NASDAQ:BRKR), Frank Laukien, invested over $1 million of his own money in the company’s stock (read more about the CEO’s purchase and the company). Bruker provides scientific instruments and products, principally to life science customers. It trades at a high price-to-earnings ratio of 27, but is expected to grow its business over the next several years: it trades at 16 times forward earnings estimates, a considerably cheaper multiple. While earnings per share were down for the first half of the year versus 2011, this was partly due to increased research and development spending (which in theory should benefit the company in the future).

AGCO Corporation (NYSE:AGCO) saw an investment of 61,000 shares from Tractors and Farm Equipment Limited, which is run by AGCO Board member Mallika Srinivasan. AGCO grew its earnings by 50% last quarter compared to the same period a year ago (although we suspect that some of the company’s improved business came from milder weather in the U.S. that pushed farm equipment sales earlier in the year). AGCO trades at only six times trailing earnings and so would be a bargain if it can continue performing as it has in the past; the five-year PEG ratio is 0.6, indicating that Wall Street analysts believe that the company has good growth prospects as well. See our earlier discussion of AGCO.

Board member William Greehey bought almost $24 million in stock of NuStar Energy L.P. (NYSE:NS), becoming the latest of several insiders to buy stock in the $3.5 billion market cap pipeline company. NuStar could be a good defensive stock as it pays a high dividend yield (8.9%) and its beta is 0.8. On a value basis it isn’t quite as attractive- analyst consensus is for earnings per share of $2.80 next year, which implies a forward P/E multiple of 18. In our analysis of NuStar from earlier this month, we thought that it made for a good buy compared to its peers (read our analysis of NuStar).

Bill Barrett Corporation (NYSE:BBG) Board member Carin Barth purchased 5,000 shares of the company this month at an average price of $26.59. Bill Barrett is an oil and gas exploration and production company with a strong position in the Denver-Julesburg (D-J) Basin. Falling natural gas prices have hurt the company so far this year, with net income down 18% in the first six months compared to the first half of 2011. Bill Barrett still feels good about its acreage: it invested $460 million in capital expenditures in the same period, which is high compared to a market cap of $1.3 billion. Learn more about Bill Barrett.

James Christmas, a Board member at Halcon Resources Corp (NYSE:HK), also thought that his oil and gas exploration and production company was a buy. Christmas bought 100,000 shares at an average price of $7.24. Halcon, like Bill Barrett, operates in the onshore U.S. although it has most of its proved reserves in Texas (it also recently entered the Utica Shale). Sell-side estimates are for 43 cents in EPS next year, and if the company can achieve that figure (which depends on oil and natural gas prices as well as its production) the forward multiple will end up being 17. In this case we actually thought that despite the insider purchase some of Halcon’s peers made for better buys. See which companies we liked instead.

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

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

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

The 10 Cheapest Places to Retire Abroad

Top 10 Most Expensive Luxury Cars in the World – 2014

Killer Small Business Ideas

The 50 Best Personal Finance Blogs

Most Expensive Apartments in New York City

Bloodiest UFC Fights Ever Fought

Most Expensive Rum Brands 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!