Kinder Morgan, Seattle Genetics and Target are among the companies that have seen insider buying recently.

Insiders may sell shares for any number of reasons, but conventional wisdom says that insiders really only buy shares of a company for one reason -- they believe the stock price will rise and they want to profit from it.

Pullbacks and sell-offs provide a perfect opportunity for investors who have faith in a company to snap up shares.

The Fresh Market

Since the better-than-expected earnings report, one director scooped up about 435,000 shares of The Fresh Market (NASDAQ: TFM), a specialty food retailer with more than 150 stores. That was worth more than $13.2 million and raised his stake to more than 2 million shares.

The market cap is about $1.6 billion. The long-term earnings per share (EPS) growth forecast is near 17 percent, but the price-to-earnings (P/E) ratio is greater than the industry average. Shares have climbed more than four percent in the past month. Over the past six months, the stock has outperformed Whole Foods Market.

See also: Survey: Is Carl Icahn In Trouble Following The FBI And SEC Probe?

Kinder Morgan

One Kinder Morgan (NYSE: KMI) director has acquired more than $13.5 million worth of shares so far this month. That was 400,000 shares of the stock of this midstream and energy company. Chairman and CEO Richard Kinder also bought 100,000 shares back in May.

Kinder Morgan has a market cap of about $36 billion and a dividend yield near 4.9 percent. Its P/E ratio is less than the industry average, and the long-term EPS growth forecast is more than eight percent. The share price is up almost eight percent in the past month. But over the past six months, the stock has underperformed the Nasdaq and the S&P 500.

NuStar Energy

At the end of May, one director picked up 85,000 NuStar Energy (NYSE: NS) shares for a total price of around $4.9 million. That same director also bought 55,000 shares back in March, and his total stake is now almost 2.5 million shares.

This San Antonio-based petroleum storage and transportation company has a market cap of about $4.8 billion and a dividend equivalent yield of 7.2 percent. The long-term EPS growth forecast is more than 31 percent. Shares hit a multiyear high on Friday. But over the past six months, the stock has underperformed competitor Williams Companies.

Seattle Genetics

One director bought almost 282,000 shares of Seattle Genetics (NASDAQ: SGEN) in three batches since the beginning of the month. That was worth about $9.8 million, and the transactions followed presentation of clinical data at the American Society of Clinical Oncology 50th Annual Meeting.

Seattle Genetics has a market cap near $4.6 billion. Its operating margin and return on equity are both in the red. Shares are up more than 10 percent in the past week but still down more than 27 percent from three months ago. The stock has outperformed larger competitor Pfizer over the past six months.


One director bought 10,000 shares of Target (NYSE: TGT) recently, raising his stake to more than 26,000. The transaction was valued at more than $567,000. This came on the same day that the retailer was defending its oversight of customer data, as it struggles to put last fall's data breach in the rear-view mirror.

The market cap is less than $20 billion. Target offers a dividend yield near 3.0 percent. The long-term EPS growth forecast is about 12 percent, and the P/E ratio is less than the industry average. The share price is marginally lower than three months ago. The stock has underperformed Wal-Mart and the S&P 500 over the past six months.

See also: 3 Stocks To Profit Like Bank Stock Activists


One director bought about 278,000 shares of TransDigm (NYSE: TDG) last week, bringing his total holdings to more than 3.1 million shares. Then at the end of the week, the company announced that its board of directors has declared a special cash dividend of $25.00 on each outstanding share of common stock.

The market capitalization of this aerospace company is more than $10 billion and the long-term earnings per share (EPS) growth forecast is more than 13 percent. Shares reached a new multiyear high on Friday. Over the past six months, the stock has outperformed the broader markets.

At the time of this writing, the author had no position in the mentioned equities.

Keep up with all the latest breaking news and trading ideas by following us on Twitter.

Related Articles
  1. Markets

    The 5 Biggest Chinese Natural Gas Companies

    Read about the top five Chinese natural gas companies as measured by gas production volume and learn a little more about their business operations.
  2. Markets

    The 5 Biggest Chinese Insurance Companies

    Read about the top Chinese insurance companies by market capitalization, and learn a little about their positions in the marketplace.
  3. Insurance

    Top 8 Car Insurance Companies in New Jersey

    Read about the top personal auto insurers operating in New Jersey, and learn about recent trends in market share among these companies.
  4. Stock Analysis

    How Much Coca-Cola Spends on Advertising

    Learn about Coca-Cola's ad spending and why the company has decided to spend the amount of money it does. Understand comparable companies and industries.
  5. Investing

    Welcome Back, Volatility

    Volatility is likely to resurface as the Federal Reserve gets closer to adjusting its monetary policy stance, even if that adjustment is a measured affair.
  6. Economics

    What Is The Labor Market Conundrum?

    We are facing a conundrum with investment implications: Why are wages still stagnant, when jobs are being created at the fastest pace since the late 90's?
  7. Investing

    Why Are Consumers In Hesitation?

    Diverging monetary policy globally and a stronger dollar continued to be key drivers of the recent underperformance and last week’s tumble in U.S. stocks.
  8. Economics

    Bulk Shipping Companies Struggle As Markets Soften

    The "soft" dry bulk shipping market that confronts shipping companies is a result of lower demand from China, and an excessive amount of bulk ships.
  9. Stock Analysis

    Sierra Wireless Benefits From These Megatrends

    We take a closer look at how Sierra Wireless' transition from 2G to 3G and 4G technologies, has impacted its business today, and the future expectations.
  10. Stock Analysis

    3 Growth Opportunities For ARM Holdings

    ARM Holdings highlighted several growth opportunities in its most recent roadshow presentation. Here are three of the large opportunities it talked about.
  1. Fractal Markets Hypothesis (FMH)

    An alternative investment theory to Efficient Market Hypothesis ...
  2. Core Durable Goods Orders

    New orders for U.S. core durable goods, which are the total durable ...
  3. Investopedia

    One of the best-known sources of financial information on the ...
  4. Market Depth

    The market's ability to sustain relatively large market orders ...
  5. Closing Tick

    The difference between the number of stocks that closed higher ...
  6. Institutional Brokers' Estimate ...

    A system that gathers and compiles the different estimates made ...
  1. What is the long-term outlook of the metals and mining sector?

    An industry agency council was established by the World Economic Forum in 2014 to serve as an advisory board on the future ... Read Full Answer >>
  2. What is the railroads sector?

    The railroads sector is comprised of publicly traded stocks for companies that operate railroad tracks and/or trains. Railroad ... Read Full Answer >>
  3. Who are Amgen Inc.'s (AMGN) main competitors?

    Biotech giant Amgen Inc (AMGN) bills itself as one of the first biotechnology firms. It was founded in 1980 and has grown ... Read Full Answer >>
  4. What's the most expensive stock of all time?

    Back in late August 2012, Apple’s (AAPL) stock price reached nearly $700 per share. The stock has since split but has yet ... Read Full Answer >>

You May Also Like

Trading Center

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!