The $1.44 million purchase is one of the largest buys from a corporate insider. Accenture Plc (NYSE:ACN) is a leader in the management consulting industry, and the company is a natural play on the globalization of business activity. Shares trade at a reasonable 15x price-to-earnings, a discounted valuation which doesn’t reflect its full growth potential.
Readers might consider following Accenture Plc (NYSE:ACN)’s CEO and buying the stock at current levels. Despite the recent hiccup, I believe Accenture will continue to outperform the S&P 500 over the long-term.
Specialty fashion retailer
Shares of Abercrombie & Fitch Co. (NYSE:ANF) rallied with the broader market to reach a 52-week high of $55.23 on May 23, preceding its first quarter 2013 earnings report.
The following morning, Abercrombie & Fitch Co. (NYSE:ANF) announced disappointing Q1 earnings results. The report was unsatisfactory in nearly every aspect. It posted a net loss of $0.09 per share, much wider than the $0.05 loss anticipated by Wall Street. Revenue for the Feb. 3-May 4, 2013 period reached $833.8 million, a shortfall of more than $100 million from the $941.66 million expected by investors. Finally, comparable sales fell 17% during the quarter compared to the year-ago period.
Investors reacted to the news by hitting the “sell” button, causing Abercrombie & Fitch Co. (NYSE:ANF) shares to reach the lowest price since November 2012. Abercrombie & Fitch Co. (NYSE:ANF) has struggled in recent years to post consistent operating results, as the company’s target audience loses preference for the brand in favor of competitors such as American Eagle Outfitters (NYSE:AEO), The Gap Inc (NYSE:GPS), and Urban Outfitters, Inc. (NASDAQ:URBN).
Abercrombie & Fitch Co. (NYSE:ANF) board member Craig Stapleton stepped in following the sell-off and bought 10,000 shares for $44.02 per share. The transaction value amounted to $440,000 when the stock was purchased on June 25.
Despite recent insider buying, I can’t gather enough conviction to recommend Abercrombie & Fitch Co. (NYSE:ANF). The company’s operating results have been too inconsistent in recent years to warrant a recommendation.
Foolish takeaway
While there are numerous reasons for corporate executives to sell, insider buying takes place for only one reason.
Readers might consider buying Accenture and Lennar Corporation (NYSE:LEN) based on strong long-term fundamentals. Both stocks are likely to rebound in my opinion.
Despite the insider buying at Abercrombie & Fitch, I can’t recommend the company based on management’s inconsistent performance. It’s not to say the stock can’t eventually recover, the company is simply too sporadic for me as a long-term investor.
The article $2 Million in Insider Buying at 3 Large Companies originally appeared on Fool.com.
John Macris has no position in any stocks mentioned. The Motley Fool recommends Accenture. John is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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