Three Stocks With Heavy Insider Buying Activity; Should You Follow These Insiders?

We can refocus our discussion on Arctic Cat Inc. (NASDAQ:ACAT), a manufacturer of snowmobiles and all-terrain vehicles that saw three insiders acquire shares on Friday. Director D. Christian Koch bought 1,500 shares at a weighted average price of $18.93 and currently owns 8,663 shares, which also include a few thousands of restricted stock units. Moreover, Chief Executive Officer and President Christopher T. Metz bought a 7,500-share block at prices ranging from $16.75 to $17.05, enlarging his stake to 77,201 shares. Lastly, Chief Financial Officer Christopher J. Eperjesy added 4,000 shares, acquired at a weighted average price of $18.05, to his holding that now comprises 15,591 shares. Arctic Cat Inc. (NASDAQ:ACAT)’s stock has lost nearly 44% year-to-date, partly owing to the disappointing third-quarter earnings report. However, the stock is currently trading at a forward price-to-earnings ratio of 12.23, well below the median of 18.42 for the Standard and Poor’s 500 companies. Hence, it seems that these insiders are buying shares believing that they are undervalued by the market. Alexander Mitchell’s Scopus Asset Management owned 279,400 shares of Arctic Cat Inc. (NASDAQ:ACAT) as of June 30.

Lastly, we will discuss the insider buying activity at MGIC Investment Corp. (NYSE:MTG), which has seen its stock climb by slightly more than 2% since the beginning of the year. Director C. Edward Chaplin acquired a 5,000-share stake on Thursday at a price of $9.46 per unit. This move comes after the private mortgage insurer reported its third-quarter earnings report. MGIC Investment Corp. (NYSE:MTG) posted total revenues of $269.5 million, compared to $235.1 million reported a year ago. Similarly, the company’s adjusted net income came to $124.7 million or $0.29 per diluted share, compared to $72.0 million or $0.18 registered in the same quarter a year ago. It is also worth pointing out that the stock is trading at a deep-discount at the moment, considering that it is trading at a forward P/E ratio of 9.86. Even so, one should not forget that this ratio is not an ideal proxy for value, as it does not consider future growth rates. John Griffin’s Blue Ridge Capital reported owning 12.76 million shares of MGIC Investment Corp. (NYSE:MTG) through the 13F for the June quarter.

Disclosure: None