Should You Imitate The Insider Purchase At Safeway Inc. (SWY)?

Page 1 of 2

Safeway Inc. (NYSE:SWY) senior vice president David Bond purchased 5,000 shares of the company’s stock on July 22nd, according to a Form 4 filed with the SEC. The filing now places Bond’s direct holdings of the grocery store at about 31,000 shares in addition to about 5,500 shares in his 401k. In Insider Monkey’s analysis, stocks bought by insiders tend to narrowly outperform the market in the future (read our analysis of studies on insider trading) and this makes sense since insiders should be unlikely to buy shares unless they are confident in the company’s prospects (otherwise they would instead choose to diversify their wealth and reduce company-specific risks).

Safeway Inc. (NYSE:SWY) is off its highs for the year, but is still up about 40% since the beginning of 2014. This has placed its market capitalization at $6.1 billion, or 12 times the company’s trailing earnings. The company recently reported that despite lower sales, it has managed to increase its margins with the result being that income from continuing operations is tracking about 20% higher than a year ago. The current valuation is low enough that even low growth from Safeway Inc. (NYSE:SWY) going forward could make it attractive, though of course the apparent strength of the company’s recent results has come from shedding less lucrative operations and so improved earnings might not be sustainable. Wall Street analysts do expect a small decrease in adjusted earnings per share next year, for a forward P/E of 13, and many market players are bearish ont he company with over 20% of the float held short.

Safeway Inc. (NYSE:SWY)In addition to insider trading activity, Insider Monkey also tracks quarterly 13F filings from hundreds of hedge funds and other notable investors. We’ve found that the information in these filings can be useful in helping develop investment strategies (for example, the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year) and also for tracking interest in individual stocks over time. According to our database, billionaire Ken Griffin’s Citadel Investment Group owned 2.8 million shares of Safeway Inc. (NYSE:SWY) at the end of the first quarter of 2013 (see Griffin’s stock picks).

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
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 World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

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 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!