Insiders may sell shares for any number of reasons, but there is really only one reason insiders buy shares of a company — they believe the stock price will move higher and they want to profit from it. Pullbacks and sell-offs provide a perfect opportunity for investors who have faith in a company to snap up shares. Here are some stocks that have seen insider buying recently.
Cracker Barrel Old Country Store (NASDAQ: CBRL): This retailer and restaurateur had more than 287,000 shares, worth over $14.9 million, purchased by a Sardar Biglari, a so-called beneficial owner, in the last 10 days in January. Cracker Barrel has a amarket cap of $1.2 billion, a dividend yield of 1.9% and a return on equity of 32.9%.
The share price is up more than 26% in the past three months and in the region of the 52-week high. Over that time, the stock has outperformed the Nasdaq and competitors such as Denny’s (NASDAQ: DENN) and DineEquity (NYSE: DIN).
Dominion Resources (NYSE: D): The CEO, CFO and two directors scooped up more than 17,000 shares, worth more than $881,000, at the end of January. This diversified energy company has a market cap of $28.7 billion and a dividend yield of 4.2%.
The stock has pulled back about 5% in the past month, falling below the 50-day moving average, but not the 200-day moving average. Over the past six months, the stock has underperformed competitors American Electric Power (NYSE: AEP) and NiSource (NYSE: NI), as well as the Dow.
Hess Corp. (NYSE: HES): The chairman of the board recently purchased more than 91,000 shares. That was worth almost $5 million. This New York-based integrated energy company has a market cap of $19.3 million and a P/E ratio this is a little less than the industry average. Its dividend yield is 0.7%.
Shares pulled back slightly in the past week and are down more than 33% from a year ago. The stock has underperformed larger competitors BP (NYSE: BP) and Exxon Mobil (NYSE: XOM), as well as the broader markets, over the past six months.
Icahn Enterprises (NYSE: IEP): Carl Icahn, the chairman of the board, bought up more than 12.9 million shares in January. That was worth more than $475 million. The market cap of his diversified company is $3.2 billion and its dividend yield is 1.0%. The P/E ratio is 6.3 and the company has a return on equity of 15.3%.
Shares have traded mostly between $36 and $39 since November and are below where they were a year ago. Over the past six months, the stock has underperformed the broader markets and Warren Buffett‘s Berkshire Hathaway (NYSE: BRK-A).
Community Bank System (NYSE: CBU): Some 11,000 shares, worth more than $264,000, were purchased last week by seven of this regional bank’s directors. The upstate New York-based bank holding company has a market cap of $1.1 billion and posted record Q4 EPS. Its long-term EPS growth forecast is 9.9% and the dividend yield is 3.7%.
The share price pulled back about 3% recently from a 52-week high. Over the past six months, the stock outperformed competitors M&T Bank (NYSE: MTB) and State Street (NYSE: STT), as well as the broader markets.
Colfax (NYSE: CFX): One director recently purchased more than 2.1 million shares, worth about $50 million. The same director also bought shares in October. The Maryland-based company makes industrial products and has a market cap of $1.3 billion. The long-term EPS growth forecast is 19.6%. The P/E ratio is hefty but expected to fall.
The share price has pulled back a bit in the past week and is down more than 9% from a recent 52-week high. The stock has outperformed the broader markets and competitor Robbins & Myers (NYSE: RBN) over the past six months.
Bullish: Investors interested in exchange traded funds focused on insider sentiment might want to consider the following trades:
• Guggenheim Insider Sentiment (NYSE: NFO) is about 31% higher than the 52-week low.
• Direxion All Cap Insider Sentiment Shares (NYSE: KNOW) is more than 19% higher than the 52-week low.
• Direxion Large Cap Insider Sentiment Shares (NYSE: INSD) is almost 12% higher than the 52-week low.
Traders may prefer to consider these alternative positions to some of the stocks listed above:
• Papa John’s International (NASDAQ: PZZA) is up about 47% from the 52-week low.
• Marathon Oil (NYSE: MRO) is up about 66% from the 52-week low.
• Danaher (NYSE: DHR) is up more than 34% from the 52-week low.
• Republic Bancorp (NYSE: RBCAA) is up more than 66% from the 52-week low.
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