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4 Stocks The Insiders Are Buying
Scanning insider buying activity can prove to be a worthwhile endeavor. In theory, insiders are closest to the company and have insight that individual investors outside of the company may not otherwise be aware of. Here are four notable names that have experienced significant insider purchasing activity in recent days.
IN PICTURES: 5 Reasons For Corporate Thanksgiving
Betting on a Rebound
On Wednesday of last week, a director for Akami Technologies (Nasdaq:AKAM) stepped up to the plate with an investment of just under $1 million on his company's stock. David Kenny bought 25,000 shares of AKAM at a price of $38.78 per share. Akami shareholders have had a big year so far as this stock has climbed 57.5% year-to-date.
This purchase sends the message that Kenny believes that the pullback in Akami shares following the company's Q2 earnings release was an overreaction. The company reported EPS of 20 cents versus 19 cents in the year-ago quarter. Total revenue rose 20%. Company management has also been eying Akami shares as a bargain. During Q2, it repurchased 537,000 of its own shares at an average price of $38.02.
A director for Whole Foods Market (Nasdaq:WFMI) snatched up a little over $290,000 worth of WFMI shares at a price of $36.43 on Thursday. The purchase came only two days after the company's stock price experienced a small pullback as Whole Foods has noted, decelerating growth during the first four weeks of the company's fiscal Q4. The price movement in this stock could very well turn out to be an overreaction also.
Bringing in the Reinforcements
Last Monday, a director for the defense contractor General Dynamics (NYSE:GD) picked up more than $186,000 worth of his company's shares. The buy came at a purchase price of $62.23 per share. Year-to-date, the stock has fallen 7%.
The transaction comes on the heels of General Dynamics turning in a strong Q2. The company reported a 4.4% improvement in EPS on flat revenue. Business has been going well enough apparently as management also upped its full-year guidance in conjunction with the earnings release. The aerospace and combat systems divisions of General Dynamics experienced the largest improvements in operating margins and this metric was up slightly for the company as a whole.
On Friday, a director for Time Warner (NYSE:TWX) bought just under $100,000 worth of TWX stock at a price of $32.10 per share. This transaction also occurred a couple of days after the company's earnings. The company was able to up its full-year guidance after a vibrant Q2 that saw healthy gains in ad revenue. Shares of TWX are up 11% so far this year.
The Bottom Line
The recent buying activity in these names should not be construed as automatic conviction buy ratings for each of these stocks. The purchases do serve as a good screen for investors looking for new companies that could be ripe to add to the portfolio. As always, investors should conduct their own due diligence rather than relying solely on the decisions of insiders. (Got a hot stock tip? Follow up on it with these tips to avoid getting burned. To learn more, check out Due Diligence In 10 Easy Steps.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
IN PICTURES: 5 Reasons For Corporate Thanksgiving
Betting on a Rebound
On Wednesday of last week, a director for Akami Technologies (Nasdaq:AKAM) stepped up to the plate with an investment of just under $1 million on his company's stock. David Kenny bought 25,000 shares of AKAM at a price of $38.78 per share. Akami shareholders have had a big year so far as this stock has climbed 57.5% year-to-date.
This purchase sends the message that Kenny believes that the pullback in Akami shares following the company's Q2 earnings release was an overreaction. The company reported EPS of 20 cents versus 19 cents in the year-ago quarter. Total revenue rose 20%. Company management has also been eying Akami shares as a bargain. During Q2, it repurchased 537,000 of its own shares at an average price of $38.02.
A director for Whole Foods Market (Nasdaq:WFMI) snatched up a little over $290,000 worth of WFMI shares at a price of $36.43 on Thursday. The purchase came only two days after the company's stock price experienced a small pullback as Whole Foods has noted, decelerating growth during the first four weeks of the company's fiscal Q4. The price movement in this stock could very well turn out to be an overreaction also.
Last Monday, a director for the defense contractor General Dynamics (NYSE:GD) picked up more than $186,000 worth of his company's shares. The buy came at a purchase price of $62.23 per share. Year-to-date, the stock has fallen 7%.
The transaction comes on the heels of General Dynamics turning in a strong Q2. The company reported a 4.4% improvement in EPS on flat revenue. Business has been going well enough apparently as management also upped its full-year guidance in conjunction with the earnings release. The aerospace and combat systems divisions of General Dynamics experienced the largest improvements in operating margins and this metric was up slightly for the company as a whole.
On Friday, a director for Time Warner (NYSE:TWX) bought just under $100,000 worth of TWX stock at a price of $32.10 per share. This transaction also occurred a couple of days after the company's earnings. The company was able to up its full-year guidance after a vibrant Q2 that saw healthy gains in ad revenue. Shares of TWX are up 11% so far this year.
The Bottom Line
The recent buying activity in these names should not be construed as automatic conviction buy ratings for each of these stocks. The purchases do serve as a good screen for investors looking for new companies that could be ripe to add to the portfolio. As always, investors should conduct their own due diligence rather than relying solely on the decisions of insiders. (Got a hot stock tip? Follow up on it with these tips to avoid getting burned. To learn more, check out Due Diligence In 10 Easy Steps.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
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