Here's What Insiders Have Been Buying Recently
Continental Resources, Prospect Capital and Tripadvisor have seen significant insider buying recently, even as the markets hit new highs, crude oil prices fall and the end of the year approaches.
Insiders may sell shares for any number of reasons, but conventional wisdom says that insiders really only buy shares of a company for one reason: If they believe the stock price will rise and they want to profit from it.
Pullbacks and sell-offs can provide a perfect opportunity for investors who have faith in a company to snatch up shares.
Continental Resources
Last week, one director picked up a total of 15,000 Continental Resources, Inc. (NYSE: CLR) shares at $40.20 apiece, for a total price of more than $600,000. That brought his total stake to 25,000 shares. Like many others in the sector, Continental has been affected by the recent low price of crude.
This Ohio-based independent oil and gas company has a market capitalization near $14 billion and a return on equity that is about 23 percent. Note that short interest is more than 16 percent of the float. The share price ended the week at $38.23, so the transaction does not look particularly well-timed.
See also: Jim Cramer Advises His Viewers On Kinder Morgan, Royal Dutch Shell And ConocoPhillips
Hi-Crush Partners
One of the co-CEOs recently obtained 30,000 shares of Hi-Crush Partners LP (NYSE: HCLP) for around $1.16 million. The per-share price was $38.70. The buy came before this supplier of proppant for hydraulic fracturing was upgraded last week by Robert W. Baird analysts.
The market cap of this Houston-based company is more than $1 billion, and it has a dividend yield near 6.5 percent. The return on equity is more than 68 percent. The share price at Friday's close was at $35.68, down fractionally for the week but more than 14 percent lower than a month ago.
OCI Partners
One director bought more than 101,000 shares last week of OCI Partners LP (NYSE: OCIP) at prices ranging from $16.88 to $16.99, for a total of more than $1.71 million. That same director also bought about 90,000 shares in November following the earnings miss in the third quarter report.
The market cap of this industrial chemicals producer is more than $1 billion. The dividend yield is about 6.1 percent. Note that the price-to-earnings (P/E) ratio is much greater than the industry average.
Shares ended Friday's trading at $16.72, up about 2 percent from the 52-week low set early last week.
Parkway Properties
The CEO last week bought a 25,000 shares of Parkway Properties Inc (NYSE: PKY) at $18.75 apiece, and three other executives each bought a batch of 1,000 shares. That cumulatively was worth more than $524,000.
Stifel downgraded shares of the real estate investment trust last week.
The market cap of this Orlando-based company is more than $2 billion and the dividend yield is about 4.1 percent. Its long-term earnings per share (EPS) growth forecast is more than 16 percent, but the return on equity is less than 1 percent.
At $18.59, the share price is more than 4 percent lower than a week ago.
Prospect Capital
The chief operating officer and the chief financial officer of Prospect Capital Corporation (NASDAQ: PSEC) together acquired more than $1.93 million worth of shares last week. That was more than 212,000 shares of the stock at prices ranging from $9.10 to $9.12.
Also last week: Prospect announced follow-on, incremental capital to InterDent.
Prospect's market cap is around $3 billion and the dividend yield is near 12.8 percent. The business development company has a P/E ratio lower than the industry average. Here again, the share price dropped after the insider buys, ending the week at $8.89, not far above the 52-week low.
See also: Bank Of America: How To Profit From An Aging Population
Tripadvisor
The CEO recently picked up less than 13,800 Tripadvisor Inc (NASDAQ: TRIP) shares at a price of about $72.55 apiece. That cost him about $1 million and brought his total stake to more than 283,000 shares.
News of the insider buy helped boost shares about 5 percent last week.
This online travel company has a market cap of about $11 billion. The long-term EPS growth forecast is about 24 percent, but the P/E ratio is greater than the industry average. Shares ended the trading session Friday at $77.14, though the stock has yet to fully recover from the sell-off after November's earnings miss.
At the time of this writing, the author had no position in the mentioned equities.
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