Several companies have reported group insider buying or pricey singular insider buying as their companies near or hit their 52-week highs. The following three companies have reported these insider buys throughout the month of July. Watching group insider buying (especially at high prices) is important because it can signify a collective faith in the stability and potential for additional growth in a company. It can also be beneficial to note insider buys with large transaction amounts because insiders typically will not invest their money into a company if they know they are going to lose it.
S.Y. Bancorp (SYBT)
Nine different insiders made buys into S.Y. Bancorp over the past few weeks. These buys come as the stock price has hit a three-year high. The nine insiders purchased a small total of 891 shares at an average price of $24.99 per share. The total combined transaction amount for these insiders equaled $22,266.09.
The insiders included the following directors: Charles Edinger III, Carle Herde, Richard Lechleiter, Bruce Madison, Richard Northern, Stephen Priebe, Nicholas Simon and Norman Tasman as well as President James Hillebrand.
As seen in the chart above, S.Y. Bancorp has a strong history of insiders buying company stock. Approximately 7% of the company’s shares are held by insiders.
S.Y. Bancorp is a bank holding company and is the parent company of Stock Yards Bank & Trust Company, which was established in 1904 in Louisville, Ky. The bank offers financial services through its Wealth Management Group, which provides investment management and trust services. The company has been recognized by U.S. Banker on several occasions as one of the top-performing banks in the nation.
S.Y. Bancorp’s historical price, revenue and net income:
S.Y. Bancorp has seen rising earnings estimates recently as it completes the acquisition of THE BANCorp. This acquisition expands S.Y. Bancorp’s reach by adding 35 branches in three metropolitan areas—Louisville, Indianapolis and Cincinnati.
The price of S.Y. Bancorp is sitting at a three-year high, and the P/S ratio is at a two-year high of 3.25. The company has also issued $84.065 million of debt in the past three years, but its debt level is acceptable.
S.Y. Bancorp is sitting at its 52-week and three-year high in price.
The Peter Lynch Chart shows that S.Y. Bancorp appears to be undervalued:
S.Y. Bancorp has a market cap of $368.1 million; its shares were traded at around $26.41 with a P/E ratio of 14.00 and a P/S ratio of 3.30. The dividend yield for S.Y. stocks is 3%. The company had an annual average earnings growth of 2.8% over the past 10 years. GuruFocus rated S.Y. Bancorp the business predictability rank of 3.5-star.
Walgreen Company (WAG)
Director Stefano Pessina made a significant buy into Walgreen’s last week. On July 12 the director bought 34,439 shares at an average price of $45.77 per share. This transaction cost the director a total of $1,576,273. Since his buy, the price per share has increased approximately 7.41%. Pessina currently holds more than 75 million shares of Walgreen Company.
Pessina also made a significant buy in April when he purchased 83,300 shares of company stock.
Pessina is the first insider making buys since 2010.
Walgreens is the nation’s largest drugstore chain with fiscal 2012 sales of $72 billion. Walgreens' scope of pharmacy services includes retail, specialty, infusion, medical facility and mail service, along with respiratory services. These services improve health outcomes and lower costs for payers including employers, managed care organizations, health systems, pharmacy benefit managers and the public sector.
Walgreens historical price, revenue and net income:
On July 10, Walgreens increased its shareholder payout by 14.5% by upping its quarterly cash dividend to $0.315 per share. Walgreens has paid a dividend in 232 consecutive quarters, spanning over 80 years. Over the past five years, Walgreens annual dividend has increased from $0.45 to $1.26 per share, resulting in a compound annual growth rate of approximately 23%.
Walgreens is currently sitting near its 52-week and 10-year high price of $50.90.
According to the Peter Lynch Chart Walgreens appears to be overvalued:
Walgreen Company has a market cap of $46.4 billion; its shares were traded at around $49.16 with a P/E ratio of 21.60 and a P/S ratio of 0.60. The company had an annual average earnings growth of 11.2% over the past 10 years. GuruFocus rated Walgreens the business predictability rank of 4-star.
NorthWestern Corp. (NWE)
On July 1, eight insiders made buys into NorthWestern Corp. These insiders bought a total of 3,588 shares in the price range of $39.75-$39.90. The cumulative transaction amount for these buys totaled $130,272.15. Since these buys, the price per share has increased approximately 5.99%-6.39%.
The insiders included the directors: Dorothy Bradley, Linn Draper, Philip Maslowe, Denton Peoples, Julia Johnson and Stephen Adik as well as VP and General Counsel Grahame Heather and VP of Transmission Michael Cashell.
This insider cluster is the largest group insider buying reported for the company.
NorthWestern Energy provides electricity and natural gas in the Upper Midwest and Northwest, serving approximately 673,200 customers in Montana, South Dakota and Nebraska.
NorthWestern’s historical price, revenue and net income:
The company is set to release its second quarter financial release on July 25.
NorthWestern Energy’s price is sitting near both a 52-week and 10-year high price of $42.82.
NorthWestern has a market cap of $1.6 billion; its shares were traded at around $42.26 with a P/E ratio of 15.00 and a P/S ratio of 1.50. The dividend yield for NorthWestern stocks is 3.60%. The company had an annual average earnings growth of 13.6% over the past 10 years.
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