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3 Insiders Patting Their Stocks On The Back
In a falling market there are many indicators that help tip investors off to a stock's turnaround potential. One of those is insider purchases - particularly when they're made after a steep plunge in share prices. The confidence of those who intimately know the company's workings is one of the best harbingers of future stock price appreciation.
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It's not a foolproof method, but it does have a great track record. Below we list three such stocks, companies in which insiders have taken sizeable long positions in the last week - at the same time the S&P 500 SPDR ETF (NYSE:SPY) is off its April 26 highs by 12%.
Dynamic Duo Buying Big
FTI Consulting, Inc. (NYSE:FCN) is a $1.5 billion company by market cap that offers its clients a range of services, from corporate finance and restructuring to litigation to strategic communications. Since April 26 the company's shares have slid 19%. They pay no dividend and trade at a multiple of 14x last year's earnings.
On July 15, the company's Chairman of the Board, Dennis J Shaughnessy, purchased 10,000 shares at a cost of $32.82 each. Jack Dunn, the company's president and CEO also bought 10,000 shares that day. His buy price was $33.19.
Plastics!
A. Schulman, Inc. (Nasdaq:SHLM) supplies the auto, packaging and consumer products industries with a variety of plastics and resins. The company's stock is down 30% since the market's April highs were registered. That lags the overall basic materials sector, represented by the Materials SPDR ETF (NYSE:XLB), whose shares have declined less than 15% over the same time frame. SHLM stock pays 3.3% dividend annually and trades with a P/E of 12.65.
Gary Miller, the company's VP, Global Supply Chain and CPO, bought over $190,000 worth of stock on July 15.
Luby's, Inc. (NYSE:LUB) President and CEO, Christopher James Pappas and COO, Harris J Pappas, just bought more than $870,000 worth of the company's stock on July 15.
Luby's operates cafeteria style restaurants in Texas. The stock pays no dividend and has yet to report positive earnings for the latest full year. Yet the shares are up nearly 19% since the broad market topped back in late April.
The Bottom Line
Insider buying, when done in significant quantities, is as sure a sign as any that there's value to be had in a company's shares. (To learn more, see Delving Into Insider Investments.) When it's done after a 15% drop in the overall market, chalk it up as a stout vote of confidence that a turnaround is likely inevitable.
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
IN PICTURES: Retire A Millionaire In 10 Steps
It's not a foolproof method, but it does have a great track record. Below we list three such stocks, companies in which insiders have taken sizeable long positions in the last week - at the same time the S&P 500 SPDR ETF (NYSE:SPY) is off its April 26 highs by 12%.
Dynamic Duo Buying Big
FTI Consulting, Inc. (NYSE:FCN) is a $1.5 billion company by market cap that offers its clients a range of services, from corporate finance and restructuring to litigation to strategic communications. Since April 26 the company's shares have slid 19%. They pay no dividend and trade at a multiple of 14x last year's earnings.
On July 15, the company's Chairman of the Board, Dennis J Shaughnessy, purchased 10,000 shares at a cost of $32.82 each. Jack Dunn, the company's president and CEO also bought 10,000 shares that day. His buy price was $33.19.
A. Schulman, Inc. (Nasdaq:SHLM) supplies the auto, packaging and consumer products industries with a variety of plastics and resins. The company's stock is down 30% since the market's April highs were registered. That lags the overall basic materials sector, represented by the Materials SPDR ETF (NYSE:XLB), whose shares have declined less than 15% over the same time frame. SHLM stock pays 3.3% dividend annually and trades with a P/E of 12.65.
Gary Miller, the company's VP, Global Supply Chain and CPO, bought over $190,000 worth of stock on July 15.
Luby's, Inc. (NYSE:LUB) President and CEO, Christopher James Pappas and COO, Harris J Pappas, just bought more than $870,000 worth of the company's stock on July 15.
Luby's operates cafeteria style restaurants in Texas. The stock pays no dividend and has yet to report positive earnings for the latest full year. Yet the shares are up nearly 19% since the broad market topped back in late April.
The Bottom Line
Insider buying, when done in significant quantities, is as sure a sign as any that there's value to be had in a company's shares. (To learn more, see Delving Into Insider Investments.) When it's done after a 15% drop in the overall market, chalk it up as a stout vote of confidence that a turnaround is likely inevitable.
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
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