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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 (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 (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 (KLAC) and Lam Research (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 (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 (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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