Insider Buying
Insider Buying
One of my favorite things to look for when trying to find new investment ideas is insiders buying their own stock in the public market. When an executive sells a stock, it could be for a variety of reasons. They have to pay taxes. A new vacation home. Divorce settlement money. When an insider sells stock in the company they works for it is hard to evaluate what that means. But when an insider buys stock in the open market it only means one thing — they think the stock is undervalued.
I spent Sunday afternoon scrounging through screeners to find what companies insiders have been purchasing their own stock in the past week. The list of stocks I have came up with is pretty compelling. Some of these stocks are trading at 52-week lows. Others look like great contrarian investments at first glance.
Every Sunday I will publish a list of actionable stock ideas, such as insiders buying activity, to give subscribers a list of stocks we can research throughout the week. We can then discuss the list of stocks together in our group chat and figure out what ones look the most interesting to actually dig into. These actionable Sunday newsletters will be shorter than my usual ones, but hopefully just as valuable as we can then have a list of stocks to dig into.
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Insider Buying Activity
RKT: Multiple executives including the CEO have been buying stock in the open market using a 10b5-1 trading plan. You can see the CEO’s recent transaction here on December 9th.
GIII: The CEO bought $3.1 million worth of the stock, the EVP bought almost $250k and a director bought $125k right after the stock dropped 50%. This one looks rather attractive.
OABI: A director purchased 22,250 shares at $3.75 on December 6th right after the CEO bought 300,000 shares at $3.38 on November 30th. The CFO was also seen purchasing 10,000 shares at $2.81 on November 28th. This company just started trading in the open market via spinoff and could be compelling to dig into. This is a biotech so way out of my competence circle.
SCOR: A director purchased 50,000 shares on December 8th at $1.17 per share. Cerberus Capital Management, a PE firm with a director seat, bought 1.5 million shares at $1.10 and an additional 50,000 shares at $1.26. Another director bought 25,000 shares at $1.19. This is actually a pretty interesting little company. It is trading at a 5-year low, down 95%, and there has been insider buys for the past month of so.
SPOK: A director with Braeside Capital was buying shares all last week, here and here. The COO bought 2,000 shares at $7.76. The stock isn’t down much this year, but over the past five years it is down 45%. There is a 15% dividend yield on this company so it might be good to look at for any income oriented investors.
HPP: The CEO bought 9,300 shares at $10.63. The stock is down 60% over the past year and focuses on office and studio real estate. There is a 9.71% yield at the current price.
SIX: The CFO purchased multiple tranches of shares at various prices over the past week. In total he bought 9,497 shares in the $22-21 per share range. The stock is down 45% in a year and almost 70% over a five-year period. I know a few smart value guys in this name.
AE: Two directors each bought shares in the open market over the past week. One director bought 656 shares at $37.26. Another director bought 500 shares at $37.5. This follows after the company announced in November that they bought 44.2% of the shares outstanding from their largest shareholder, paying $70 million for 1.9 million shares. It might be good to dig in here and figure out what is going on. These are major development that no one is talking about.
Disclosure: I am not long or short any of the stocks in this article. This is not investment advice. I am not a financial advisor. Do your own due diligence.
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