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. Pullbacks and 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.
Akamai Technologies (AKAM): The chief scientist for this content delivery and cloud infrastructure services provider bought up 100,000 shares last week. That was worth more than $3.3 million. The market cap of his Cambridge, Mass.-based company is $6.0 billion.
Shares sold off over the recent announcement of the departure of the CEO, but the share price is still up nearly 19% from six months ago. In that time, the stock has underperformed competitors such as Level 3 Communications (LVLT) and Limelight Networks (LLNW).
See also: Akamai Up over 4% After Insider Buying
Basic Energy Services (BAS): Two directors recently purchased more than 63,000 shares, worth more than $850,000. This Midland, Tex.-based oil and gas driller has a market cap of $651.9 million and it beat first-quarter revenue estimates but its EPS fell short. It has a PE ratio of 7.3 and a PEG ratio of 0.7.
Though the share price is up more than 9% in the past week, year to date it is down more than 23%. Over the past six months, the stock has underperformed competitors such as Tesco (TESO) and Gulfmark Offshore (GLF), as well as the broader markets.
Life Time Fitness (LTM): The chairman purchased almost 17,000 shares of this builder and operator of sports and fitness centers last week. That was worth more than $745,000. First-quarter earnings of this Minnesota-based company were solid, but the guidance did not impress investors, so shares fell.
It has a market cap of $2.0 billion and its long-term EPS growth forecast is 16.0%. Shares rose about 3% in the past week and are trading more than 18% higher than a year ago. The stock has outperformed the broader markets in that time.
Netflix (NFLX): Some 6,000 shares, worth more than $510,000, were purchased last week by a director. The company has a market cap of $4.5 billion. Its long-term EPS growth forecast is 18.4% and its return on equity is 34.4%. But the share price has been falling since the recent Q1 earnings release and is now more than 65% lower than a year ago.
Because of the pullback, the stock underperformed competitors such as Amazon.com (AMZN) and Coinstar (CSTR), as well as the broader markets, over the past six months.
See also: So Much for Netflix’s Recovery
Och-Ziff Capital Management (OZM): The CEO and an executive managing director recently purchased more than 31,000 shares, worth over $255,000. Shares of the New York-based investment manager have mostly recovered from a pullback following the first-quarter report.
It has a dividend yield of 4.5% and a long-term EPS growth forecast of 12.7%. Shares rose more than 8% in the past week but are up less than 6% year to date. The stock has outperformed the likes of Blackstone Group (BX) and Citigroup (C) over the past six months.
Opko Health (OPK): The chairman continues to periodically buy batches of shares, as he has done since last November. He bought 275,000 shares, worth more than $1.3 million, in the past week. This Miami-based health care company has a market cap of $1.4 billion. Short interest is 22.4% of the float.
Shares have traded mostly between $4.50 and $5.50 since October, and the share price is about 5% lower that at the beginning of the year. Over the past six months, the stock has underperformed competitors such as Allergan (AGN) and the broader markets.
Action Items:
Bullish: Investors interested in exchange traded funds focused on insider sentiment might want to consider the following trades:
- Guggenheim Insider Sentiment (NFO) is more than 12% higher year to date.
- Direxion All Cap Insider Sentiment Shares (KNOW) is more than 11% higher year to date.
Bearish:
Traders may prefer to consider these alternative positions to some of the stocks listed above:
- AOL (AOL) is up more than 67% year to date.
- Town Sports International (CLUB) is up almost 74% year to date.
- American Capital (ACAS) is up almost 44% year to date.
- MAKO Surgical (MAKO) is up more than 62% year to date.
This article is written by Benzinga Staff Writer Nelson Hem. Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.
