Three Companies Witnessing Strong Insider Activity on the Buy Side

Earlier this week, Costco Wholesale Corporation (NASDAQ:COST) registered the first insider buy in more than five years. Director John W. Stanton purchased 10,000 shares on Tuesday at a weighted average price of $155.40, boosting his stake to 13,456 shares. The Director also owns an indirect ownership stake of 422 shares through the Stanton Family Trust. Let us remind you that the global retailer saw strong insider selling activity during October, so one should keep in mind the insider trading activity on both sides. The aforementioned insider acquisition might not be quite timely, considering that the shares of Costco are currently trading at a trailing P/E ratio of 29.13, which compares with 23.41 for the S&P 500 Index. At the beginning of November, Costco posted sluggish comparable monthly sales for October, which decreased 1% year-on-year. Even so, its net sales in October increased to $8.78 billion from $8.73 billion reported in the same month last year. Meanwhile, 44 hedge funds within our database had positions in the company at the end of the June quarter, amassing 2.60% of its outstanding shares. Warren Buffett’s Berkshire Hathaway held its position in Costco Wholesale Corporation (NASDAQ:COST) unchanged during the second quarter at 4.33 million shares.

Lastly, PNM Resources Inc. (NYSE:PNM) has seen one of its directors acquire shares thus far this week. Director Bruce W. Wilkinson reported acquiring 10,000 shares on Tuesday at a price of $27.88 per share. After the recent acquisition, the Director currently owns 33,301 shares. The shares of the energy holding company are slightly over 5% in the red year-to-date, after advancing 12% since the beginning of September. Several valuation metrics suggest that the stock has still more room to run in the upcoming months. To be more detailed on that, PNM’s shares are trading at a trailing P/E ratio of 17.85, noticeably below the ratio of the S&P 500. The company’s strong third-quarter financial performance led its management narrow the 2015 consolidated earnings guidance to the range of $1.56-to-$1.61 from the previous range of $1.50-to-$1.62. PNM Resources lost some of its charm among the hedge fund industry during the second quarter, as the number of money managers with stakes in the company decreased to 17 from 22 quarter-over-quarter. Israel Englander’s Millennium Management held a 1.55 million-share stake in PNM Resources Inc. (NYSE:PNM) on June 30.

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