Buy Low with Insiders: 3 Battered Stocks that Appear Poised for a Rebound

Imperva Inc. (NYSE:IMPV) had not witnessed any insider buying since late 2012 until this week. Director Albert A. Pimentel reported purchasing 5,000 shares on Monday at prices that ranged from $38.31 to $39.51 per share, all of which are held by the Pimentel Family Trust U/D/T. The family trust fund currently owns 55,000 shares, while the Director holds an additional direct ownership stake of 4,475 shares.

The stock of the cyber-security solutions company has lost more than 52% since December 2015, after having delivered an exceptional performance throughout 2015. Earlier this month, the company released its earnings report for the fourth quarter and full 2015 year. The shares of Imperva plummeted on the announcement, presumably because of worse-than-expected earnings guidance for the 2016 year. The company generated non-GAAP net income of $3.5 million on revenue of $234.3 million in 2015, compared with a non-GAAP net loss of $19.0 million on revenue of $164.0 million reported for 2014. Most importantly, Imperva announced that it anticipates non-GAAP net profit in the range of $5.7 million to $7.7 million for 2016, which does not look overly optimistic given that the company anticipates total revenue in the range of $302 million to $307 million for the year. Similarly, the full-year earnings guidance came in under analysts’ expectations. Indeed, margin expansion is of crucial importance in the long-term, but investors might give it too much importance in the short-term. A total of 23 smart money investors owned the battered stock at the end of the third quarter, amassing nearly 7% of the company’s outstanding shares. Donald Chiboucis’ Columbus Circle Investors boosted its position in Imperva Inc. (NYSE:IMPV) during the last quarter of 2015 to 520,013 shares, up by about 33%.

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