The CEO of Bally Technologies Inc. (NYSE:BYI), a $2 billion market cap gaming equipment and operations company, was another insider buying up his company’s stock. The stock is higher today on the news that the state of New Jersey may legalize Internet gambling, and possibly also building off the recent report of double-digit growth rates of both revenue and earnings in its most recent quarter versus a year earlier. At a trailing earnings multiple of 17, the market does not seem to be expecting much additional growth and so Bally could a good value if its strong performance continues. Empyrean Capital Partners reported a position of 1.9 million shares at the end of September.
Multiple insiders have been buying shares of Computer Programs & Systems, Inc. (NASDAQ:CPSI); consensus insider purchases are a particularly bullish signal. Computer Programs & Systems is a provider of healthcare information technology and has a market capitalization of about $540 million (with about 90,000 shares traded per day and a stock price of $49, there is plenty of dollar volume). The company is another growth player, with net income rising 39% in the fourth quarter of 2012 from its levels in Q4 2011, and another company where the market seems to expect a sharp slowdown given the trailing P/E of 18.
David Mendels, the COO of online video company Brightcove Inc (NASDAQ:BCOV), bought 7,700 shares at prices under $6.50 per share. Brightcove is another smaller-cap stock but once again we get daily dollar volume of over $3 million based on that stock price and an average daily volume of about 470,000 shares. Brightcove is unprofitable on a trailing basis, is expected to remain unprofitable this year, and is projected to report only 2 cents per share of earnings in 2014. We think that it is too speculative to consider as a value stock, even with a high growth rate on the top line.
Disclosure: I own no shares of any stocks mentioned in this article.