Timendi causa est nescire - Ignorance is the cause of fear.” ― Lucius Annaeus Seneca, Natural Questions
We are starting a new weekly feature today. Every week we will be providing very brief overviews of five interesting stocks insiders are currently buying. I have always found insider buying one of best indicators that a stock may be undervalued.
In fact, insider buying was a great 'tell' that the market had gotten oversold during the fourth quarter sell-off. Insider buying hit a eight-year high in December. It is also a key reason the model portfolio at The Insiders Forum has smoked the performance of Russell 2000 (57.29% to 29.60%) since its launch in July 2016.
This new weekly feature will usually be published on Friday or Saturday. However, since markets are closed for the holiday today, our inaugural piece will go out this Monday.
So, here are five stocks that look interesting and have had recent insider buying.
Let's start with Xbiotech (XBIT) which gets relatively little coverage here on SeekingAlpha despite an approximate $300 million market cap. Two beneficial owners have been buying shares frequently over the past two quarters. One 'Rennes Foundation' bought over $1 million in new shares over three transactions less than two weeks ago. We have never looked at this name closely before. However, we will be provided an exclusive 'deep dive' on this concern to Biotech Forum members later this week.
Post Holdings (POST) sees a director buy almost $5 million shares in four transactions in February so far. It is the first insider buying in this name in almost exactly a year. The shares are up some 25% since the last insider buys in this concern, which were much smaller in nature.
Next up is Calix Inc. (CALX), another name I have not looked at before. A CEO and director bought just over $800,000 February 8th. As can be seen above, the stock sold off after the company's Q4 results. Insiders seem to signaling they believe this will be a temporary decline. Calix will our inclusive 'deep dive' on The Insider Forum this week.
Another stock that has been under pressure of late also picked up a notable insider buy. A director at Goodyear Tire & Rubber Company (GT) bought just over $650,000 worth of new shares on February 13th. Of additional note, this is the first insider purchase in this name in over two and half years. The stock does not seem expensive at roughly eight times earnings with an over three percent yield.
Finally, medical device maker Zimmer Biomet Holdings (ZBH) is seeing some significant insider love this month. Over a half dozen directors and the CEO has scarfed up almost $3 million in new shares in aggregate so far in February. The stock has been more than a solid performer so far in 2019, but insiders apparently believe the shares can rally further.
Knowledge is the ultimate weapon. It always has been.” ― Jim Butcher, White Night
Thank You & Happy Hunting,
Founder, The Biotech Forum, The Busted IPO Forum & The Insiders Forum