Strong Insider Buying Activity Might Point To Three Stocks Poised To Explode

We will move on to New Mountain Finance Corp. (NYSE:NMFC), a private equity firm primarily focused on growth equity transactions, leveraged acquisitions, and management buyouts. Steven B. Klinsky, the Founder of the company and the Chairman of its Board of Directors, bought 500,000 shares at $14.14 apiece last Friday, boosting his stake to 3.06 million shares. It is also worth noting that Klinsky owns an additional 849,000 shares indirectly either through the Steven B. Klinsky Trust or the Steven B. Klinsky Non-GST Exempt Trust. The chairman acquired the shares in his latest transaction through an underwritten offering of 5.75 million shares of common stock. The capital raised from the offering is intended to be used for new investments in portfolio companies, which points to the fact that the company is ready to grow and deliver attractive gains for its shareholders. The shares of New Mountain have slumped significantly since mid-September, but it appears that they are bouncing back at the moment. Michael Novogratz’s Fortress Investment Group owns 150,000 shares of New Mountain Finance Corp. (NYSE:NMFC) as of June 30.

Finally, Darden Restaurants Inc. (NYSE:DRI), which owns and operates over 1,500 restaurants, saw two insiders buy stock on Friday. Director Charles M. Sonsteby added 2,000 shares at $71.23 per share to his holding that now consists of 5,500 shares. At the same time, James P. Fogarty, another Director, acquired 2,900 shares for $70.50 each, increasing his position to 4,890 shares. Just a few days ago, the company reported its financial results for the first quarter of fiscal 2016 that ended August 30, 2015. The company reported higher-than-expected sales, thanks to the strong improvements of its Olive Garden brand. Darden’s revenues increased by 5.7% year-over-year to $1.69 billion last quarter, so the company raised its full-year guidance on adjusted earnings per diluted share from continuing operations to between $3.15 and $3.30, compared to its previously-disclosed guidance of $3.05-to-$3.20. Let’s not forget to mention that the shares of Darden have advanced by more than 15% since the beginning of the year, greatly outperforming the broader market. Jeffrey Smith’s Starboard Value LP, which pushed Darden Restaurants Inc. (NYSE:DRI) to spin-off some restaurants into an REIT (i.e. the spinning-off is in the process of being completed), represents the largest shareholder of the company within our database, with 11.64 million shares.

Disclosure: None