Two Small-Cap Consumer Cyclical Stocks Insiders Are Buying

At InsiderMonkey, we track insider purchases every day. It is very important to our investment strategy, just like keeping an eye on hedge fund activity. Therefore, in this article, I will look into two companies in the cyclical consumer goods and services segment, which have seen insiders buy their stock over the last few days.

First off, I’d like to look into International Speedway Corporation (NASDAQ:ISCA), a $1.5 billion market cap owner of motorsports entertainment facilities and promoter of motorsports-themed entertainment activities in the United States. On April 17, Edsel Ford, Board Director, acquired 10,000 Class A shares of the company, for $32.35 per share. He now owns more than 20,300 shares of the company (both through direct and indirect holdings), worth more than $650,000.

International Speedway Corporation (NASDAQ:ISCA)

In addition, another insider, a more than 10% owner, the France Family Group, bought more than 580 shares of International Speedway Corporation (NASDAQ:ISCA) since the beginning of the month, for prices ranging from $31.34 per share to $32.85 per share. Following four deals, the group owns more than 18.17 million shares.

Although the company boasts below average returns and on-average margins, and does not trade particularly cheap (at 28.8 x P/E) analysts tend to recommend its stock, mainly on account of its long–term growth potential, a 0.75% dividend yield (and a dividend growth history), and decent financial standing.

Moreover, a wide institutional sponsorship should provide confidence for those investing in International Speedway Corporation (NASDAQ:ISCA). John W. Rogers‘ Ariel Investments owns more than 5.9 million shares and increased its stakes by 5% over the last reported quarter, and Peter Schliemann‘s Rutabaga Capital Management started a new position in the stock with 608,694 shares. Other prominent investors betting on this company are Ken Griffin, D. E. Shaw, and Mario Gabelli.

The other company on this list is Einstein Noah Restaurant Group, Inc. (NASDAQ:BAGL), a $270 million market cap restaurant chain operator that works under the Einstein Bros., Noah’s New York Bagels and Manhattan Bagel Company brands. On April 17th, one the company’s Board Directors, Nelson E Heumann, acquired 5,000 shares of Common Stock for prices ranging from $15.40 per share to $15.50 per share. And this was not Mr. Heumann’s first purchase this year: he had already procured 5,412 Einstein Noah shares on March 4th. Following these transactions, the insider owns 49,580 shares of the company.

Although margins do not look particularly good, Mr. Heumann’s purchase can be understood as both an income and a long-term investment.  Einstein Noah Restaurant Group, Inc. (NASDAQ:BAGL)’s return on equity widely surpasses those of its peers, standing at 43.8%. Moreover, the firm pays out 3.41% of the current stock price in the form of quarterly dividends. In addition, EPS growth prospects also look better than those of its peers: analysts expect it to deliver average annual EPS growth rates around 15% over the next five years. Just like this insider, several major hedge funds seem to trust this company. David Einhorn owns more than 6.73 million shares, and Jim Simons recently upped his stakes by 29%, to 408,620 shares.

Disclosure: Javier Hasse holds no position in any stocks mentioned

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