Two months ago the following article by Benzinga reported insider purchases in 8 companies. At the end of the article we will take a look at returns since then:
Insiders may sell shares for any number of reasons, but there is really only one reason insiders buy shares of a company — they believe the stock price will move higher and they want to profit from it. Market-driven sell-offs provide a perfect opportunity for investors who have faith in a company to snap up shares. Here are some stocks that have seen insider buying recently.
American Railcar Industries (NASDAQ: ARII): Director and activist investor Carl Icahn has been periodically buying shares of this company, a subsidiary of Icahn Enterprises, since the beginning of August, including more than 27,000 shares worth more than $11.6 million last week. American Railcar has a market cap of $341.2 million and its dividend yield is 0.8%. The share price is about 21% lower than it was 90 days ago but is more than 27% higher than a year ago. The stock has underperformed the Dow Industrial Jones averages since the beginning of the year.
Associated Banc-Corp (NASDAQ: ASBC): More than 150,000 shares, worth over $3.7 million, of this regional bank holdings company were bought last week by the CEO, a vice chairman, and ten others. This Green Bay, Wisc.-based financial services provider has a market cap of $1.7 billion and a dividend yield of 0.4%. Its share price dropped more than 16% in the past month and shares are trading near the 52-week low. But year to date, the stock’s performance has been in line with competitors Northern Trust (NASDAQ: NTRS) and Fifth-Third Bank (NASDAQ:FITB).
Bank of New York Mellon (NYSE: BK): The CEO and the CFO purchased 75,000 shares, worth more than $1.5 million, earlier this month, and a vice chairman bought another $1 million’s worth in August. This New York-based financial giant has a dividend yield of 2.6%, a market cap of $24.6 billion, and a long-range EPS growth forecast of 12.3%. Shares have traded between $19 and $21 since early August, down from a 52-week high of $32.50. The stock has outperformed competitor Barclays (NYSE: BCS) but underperformed JPMorgan Chase (NYSE: JPM) year to date.
Mueller Industries (NYSE: MLI): Last week, two directors bought more than 570,000 shares, worth more than $25 million. This Memphis-based metal fabrication company has a dividend yield of 0.9% and a market cap of $1.7 billion. Its share price has pulled back about 9% from a recent 52-week high but it is still up almost 34% since the beginning of the year. The stock has outperformed competitor Precision Castparts (NYSE:PCP) and the Dow Jones Industrial Average over the past six months.
Prospect Capital (NASDAQ: PSEC): Earlier this month, the CEO and COO bought more than 290,000 shares of this private equity firm, worth more than $2.5 million. In fact the CEO and other insiders have been scooping up shares since May. This New York-based firm focuses on the energy sector in North America and has a market cap of $928.1 million. Its dividend yield is 14.3%. Shares have bounced back from a recent 52-week low but are still almost 20% lower than 90 days ago. The stock has outperformed competitor NGP Capital Resources (NASDAQ: NGPC) year to date.
Overseas Shipholding (NYSE: OSG): Since the beginning of August, six directors and two senior vice presidents have been purchasing shares, including more than 65,000 shares, worth nearly $1.1 million since the beginning of this month. This New York-based ocean transporter of oil and petroleum products has a market cap of $493.5 million and a dividend yield of 5.4%. The share price has been falling since the beginning of the year, including about 9% in the past week. The stock has underperformed the broader markets year to date but outperformed competitor Frontline (NYSE:FRO).
Owens-Illinois (NYSE: OI): The CEO of this maker of glass containers for beverages bought more than 121,000 shares, worth over $2 million, last week and two directors bought shares earlier this summer. This S&P 500 component has a market cap of $2.7 billion and a forward earnings multiple of just 5.8. Its shares are trading near a 52-week low after falling nearly 46% in the past six months. The stock has underperformed competitor Silgan Holdings (NASDAQ:SLGN) and the broader markets year to date.
Seattle Genetics (NASDAQ: SGEN): A pair of directors has purchased more than 1.3 million shares, worth more than $20 million, of this biotech company in the past month. The company is a rumored takeover target and sports a market cap of $2.0 billion. Shares fell from a 52-week high above $21 in late June to a 52-week low below $12 in early August, but have come back to end last week at $17.40. Over the past six months, the stock has outperformed competitors Immunogen (NASDAQ: IMGN) and Pfizer (NYSE: PFE) and the broader markets.
Here are the returns for each stock since September 12th:
ARII: 39.4%
ASBC: 9.1%
BK: 5.4%
MLI: -5.2%
PSEC: 11.6%
OSG: -23.1%
OI: 19%
SGEN: 27.1%
Some of these stocks significantly underperformed SPY’s 6.8% gain but as a group these stocks gained close to 11% since then. Check out the stocks insiders are buying right now.
