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5 Stocks Being Bought Up by Insiders

Insiders usually have the best insight into a company’s operation. They know when a company is performing well and due for a soar in share prices. Subsequently, insiders usually make purchases just before prices surge. Below, I analyze five companies which have experienced notable insider purchases. We’ll determine whether each company is undervalued and take a glimpse at their recent share performance and balance sheet.

Hertz Global Holdings (NYSE:HTZ) is the premier car rental company in the United States. The company also leases cars and equipment globally. Shares are currently trading just below $14, between its 52 week low and high of $8 and $18, respectively. The current price is above the 50-day moving average of $13.50 and the 200-day average of $11.50.

Hertz is trading relatively cheap using the price to sales valuation metric. The company is trading at a multiple of 0.72, in comparison the industry average is 1.57. The company has performed relatively well; both revenue and earnings have grown at a rate of 11% and 33%, respectively, in the recent quarter on a year over year basis. The company has a market cap of $6 billion and an enterprise value of $18 billion. The company has $413 million of cash on hand and $12.5 billion of total debt outstanding. Nevertheless, the company is liquid with a current ratio of 1.4.

Applied Materials (NASDAQ:AMAT) supplies manufacturing equipment, software, and services to the semiconductor and related industries globally. Shares of Applied Materials are trading at $13; between its 52 week low and high of $10 and $17, respectively. Currently shares are trading above the 50-day moving average of $12.20 and the 200-day average of $11.40. An insider recently purchased 4,200 shares near the current price.

Applied Materials is trading at a discount to its competitors. Shares are trading at a price to earnings multiple of 9.0, in comparison its largest competitors KLA-Tencor (NASDAQ:KLAC) and Lam Research (NASDAQ:LRCX) are trading at multiples of 11.3 and 12.5, respectively. Moreover, using the price to sales metric AMAT is trading at a ratio of 1.6, whereas its two largest competitors are trading at multiples of 2.7 and 1.8, respectively.

The company has a market cap of $17 billion and an enterprise value of $12.7 billion. The company has total cash on hand of $6.2 billion and total debt outstanding of $2 billion. The company is extremely liquid with a current ratio of 3.7. Applied Materials’ investors will also benefit from an annual dividend of $0.32 a share, which yields 2.40%.

Oasis Petroleum (NYSE:OAS) is an independent oil and gas company. The company engages in the acquisition and development of oil and natural resources in Montana and North Dakota. Shares of Oasis are trading just below $33, between its 52 week low of $18 and 52 week high of $36. Shares are trading above the 50-day moving average of $32 and above the 200-day average of $28.50.

Shares of Oasis are trading at a premium to industry. The company is trading at a price to earnings multiple of 32, above the industry average of 18. Similarly, the company is trading at a price to sales rate of 11.5, whereas the industry average is 5.9. Oasis has a market cap of $3 billion and an enterprise value of $3.2 billion. The company has total cash on hand of $300 million and total debt outstanding of $400, the company has a current ratio of 2.5.

Louisiana Bancorp (NASDAQ:LABC) operates the Bank of New Orleans; the lender provides commercial banking services to individuals and businesses in Louisiana. Shares are trading just above $16. Within the last 52 weeks, shares have traded as low as $14.50 and as high as $16.70. The current share price is above the 50-day moving average of $15.90 and the 200-day moving average of $15.80.

The company is trading at a premium to the market. Shares are trading at a price to earnings of 22.8, above the industry average of 16.1. The company is also trading at a price to sales multiple of 4, in comparison the industry average is 2.4. Nevertheless, the company is trading below its book value of $21.10 per share. Louisiana Bancorp has a market cap of $44 million and an enterprise value of $74 million. The company has $28 million of total cash on hand and $57 million of total debt outstanding.

Dana Holding (DANA) designs and manufactures auto parts and products. Shares are trading between $16 and $17. Within the previous 52 weeks, the company has traded as low as $9 and as high as $20. The current price is above the 50-day moving average of $15, and the 200-day moving average of $13.

Dana is trading at a premium to the market; the company is trading a price to earnings multiple of 25.8, in contrast the industry average is 9.7. However, when using the price to sales valuation metric, the company is trading at a slight discount; .34 in comparison the industry average is .40. Dana is also trading substantially above the book value per share of $6.80.

Dana has a market cap and enterprise value of $2.4 billion. The company has total cash on hand of $900 million and $904 million of total debt outstanding. The company has performed extremely well recently; revenues and profits have grown at 30% and 140%, respectively.

About the author:

StockCroc
I'm mostly interested in income investing using dividends, preferred stocks and other debt instruments, and pair trading.

I fundamentally analyze every business from the top down.

In my personal life, I have a strong Jewish faith and enjoy playing Scrabble and entrepreneurship.

Visit StockCroc's Website


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