This week several CEOs have been making hefty buys into their companies. The following three companies reported insider buys coming from their CEOs valued at over $100,000. It’s interesting to note when CEOs make such large changes in their holdings, as they are expected to have the most insight into the inner workings of their respective companies. GuruFocus insider data has shown that top executives like CEOs and CFOs have beaten the market on average by six percentage points a year.
ServiceSource International (SREV)
Chairman of the Board and CEO Michael Smerklo bought 12,255 shares of his company’s stock on June 10. The shares traded at an average price of $8.51 per share for a total transaction amount of $104,290. After this buy, Smerklo owns at least 731,440 shares of Service Source. The price per share has increased 0.94% since his buy.
According to Smerklo’s insider data , the CEO has a strong history of selling while the price of his company is at a high and buying when the price is at a low. Since Smerklo’s last buy in May, the price per share has increased 26.18%.
ServiceSource helps hardware, software, healthcare and life sciences companies derive from their customers more revenue from maintenance, support and subscription agreements. The company analyzes areas of the customer's service business that are not optimized, and develops and implements a suite of cloud applications and managed services for the service sales team.
ServiceSource announced a partnership with Aspect Software at the beginning of June reporting that the Aspect would be using ServiceSource’s Renew OnDemand SaaS application and services to help manage and grow its recurring revenue business. This partnership between the two companies will span ServiceSource’s reach globally to 50 countries and over 3,000 clients.
ServiceSource International has a market cap of $653.514 million; its shares were traded at around $8.49 with a P/S ratio of 2.57.
ServiceSource’s P/B and P/S ratios:
There are three gurus that own shares of ServiceSource. Click here to see these gurus’ holding histories.
Vornado Realty Trust (VNO)
Vornado Realty Trust CFO Stephen Theriot bought 3,100 shares of company stock on June 10, marking the first insider buy reported for the company since Aug. 2012. Theriot purchased these shares at an average price of $81.93 per share for a total transaction amount of $252,309. Since his buy, the price per share has dropped 1.93%.
Vornado Realty Trust is a fully integrated real estate investment trust and conducts its business through Vornado Realty LP. Vornado is one of the largest owners and managers of commercial real estate in the United States with a portfolio of over 100 million square feet, primarily located in the New York and Washington, D.C. areas. Vornado's core businesses include New York; Washington, D.C.; and, Retail Properties primarily in the northeast states, California and Puerto Rico.
Vornado Realty Trust has a market cap of $15.24 billion; its shares were traded at around $80.26 with a P/E ratio of 118.30 and P/S ratio of 6.50. The dividend yield of Vornado is 3.6%. The company had an annual average earnings growth of 7.7% over the past five years.
The analysis on Vornado reports:
· The company has poor financial strength which is usually caused by too much debt for the company.
· The price is close to a one-year high of $87.46.
· The P/S ratio is close to a three-year high of 7.17.
· The revenue has been in decline for the past year.
· The P/B ratio is close to a one-year high.
· The operating margin has been expanding which is usually a good sign.
The Peter Lynch Valuation Chart shows that Vornado appears to be overvalued:
There are currently 10 gurus that hold positions in Vornado. Click here to see their holding histories.
Signature Group Holdings (SGGH)
CEO Craig Bouchard made two different insider buys this past week costing him over $450,000.
On June 7, the CEO added 40,500 shares to his stake at an average price of $0.70 per share. This transaction cost Bouchard a total of $28,350. Since this buy, the price has increased 10%.
More recently, on June 11, Bouchard bought an additional 530,366 shares. These shares traded at $0.80 per share for a total transaction amount of $424,293. He now holds on to at least 970,000 shares of Signature Group. Since his second increase, the price per share has dropped 3.75%.
Bouchard’s buys mark the first insider transactions for the company since Aug. 2012. Since then, the price per share has increased 148.39%.
Signature Group is a credit-oriented special situations investment company that invests in the debt and equity of small and middle market companies. The company engages in acquiring, originating and managing debt investments.
Craig Bouchard was named chairman and CEO on June 5 after settling a proxy fight. Bouchard was among investors who said Sherman Oaks, the California-based Signature Group wasn’t generating a sufficient shareholder value.
Signature Group Holdings has a market cap of $94.9 million; its shares were traded around $0.79 with a P/S ratio of 2.60.
The analysis on Signature Group reports:
· The company has poor financial strength.
· The revenue has been in decline for the past three years.
· The P/B ratio is close to a five-year high of 1.72.
· The P/S ratio is close to a one-year high of 2.7.
Signature Group’s P/B and P/E ratios:
There are currently no gurus that hold a stake in Signature Group.
You can look at all CEO and CFO buys here. Also check out the full list of insider activity which includes the buys and sells of corporate executives, directors and 10% owners.
Try a free 7-Day Premium Membership Trial here.
- CEO Buys, CFO Buys: Stocks that are bought by their CEO/CFOs.
- Insider Cluster Buys: Stocks that multiple company officers and directors have bought.
- Double Buys:: Companies that both Gurus and Insiders are buying
- Triple Buys: Companies that both Gurus and Insiders are buying, and Company is buying back.