10-year

10-Year Anniversary Promotion (20% off)

Join GuruFocus Premium Membership Now for Only $279/Year

Once a decade discount

Save up to $500 on Global Membership.

Don't Miss It !

Free 7-day Trial
All Articles and Columns »

Insider Buys at 52-Week Lows

March 05, 2014 | About:
Monica Wolfe

Monica Wolfe

133 followers
Over the past week four companies have reported multiple insider buys as their price hits or nears 52-week lows. Looking at insider buys while they’re trading at low prices can offer an excellent time to buy into a company or further your research on the company. Peter Lynch once offered that insiders will sell their shares in a company for many reasons, but they will only invest it if they think that the share price will rise.

The following four companies are trading at or within 5% of their 52-week low share price and reported insider buy(s) over the past week.

Kinder Morgan Energy Partners (KMP)

Over the past week, President and COO of Kinder Morgan Energy Partners, Steven Kean, made a notable insider buy as the share price dropped to a 52-week low. Kean added 6,600 shares to his holdings at an average price of $75.50 per share. This transaction cost the President a total of $498,300, and since his buy the price per share has dropped a slight -0.74%.

1394038974692.png

Steven Kean’s buy is the first insider transaction reported for the company this year. His buy also comes as Kinder Morgan Energy Partner’s sister company, Kinder Morgan, has been upping their insider buys over the past few months.

Kinder Morgan Energy Partners is a pipeline transportation and energy storage company in North America, which owns and manages a portfolio of energy transportation and storage assets.

Kinder Morgan Energy Partners’ historical revenue and net income:

1394039948218.png

The analysis on Kinder Morgan Energy Partners reports that the company’s revenue has been in decline over the past five years and they have issued $3.6 billion in debt over the past three years. On the other hand, KMP’s operating margin is expanding, its dividend yield is at a 3-year high and its P/B, P/S and P/E ratios are all at 3-year lows.

The Peter Lynch Chart suggests that the company is currently overvalued:

1394039974096.png

Jim Simons (Trades, Portfolio), Ken Fisher (Trades, Portfolio) and Jean-Marie Eveillard (Trades, Portfolio) all maintain a position in Kinder Morgan Energy Partners. Check out their positions here.

Kinder Morgan Energy Partners has a market cap of $33.44 billion. Its shares are currently trading at around $75.38 with a P/E ratio of 57.00, a P/S ratio of 2.50 and a P/B ratio of 2.00. The dividend yield of KMP is currently at 7.10%. The company had an annual average earnings growth of 5% over the past ten years.

Chegg (CHGG)

Over the past week the CEO of Chegg Inc., Daniel Rosensweig, made a notable buy back into the company as its price dropped to its lowest point since the company’s inception. Rosenswieg added 15,504 shares to his stake at an average price of $6.57 per share. This transaction cost the CEO $101,861. Since his buy, the price per share has dropped approximately -3.35%. Rosensweig is the largest insider shareholder of Chegg stock, holding on to 654,080 shares of the company’s stock.

1394037121623.png

Chegg is a student-first connected learning platform. It is an academic company based out of Santa Clara, California, that specializes in online textbook rentals, homework help, scholarships, course reviews and internship matching.

Chegg’s historical revenue and net income:

1394037748540.png

Columbia Wanger (Trades, Portfolio) and Chuck Royce (Trades, Portfolio) are the only gurus that hold a position in Chegg. Check out their holding histories here.

The company recently released their fourth quarter and fiscal year 2013 results which highlighted:

- Digital revenues up 86% for the year.

- Fourth quarter revenue of $77.1 million, up 13% from last year.

- GAAP Net Loss of $(5.4) million, compared to a net income of $8.1 million last year.

- Revenue for the year of $255.6 million, up 20% from 2013.

- GAAP Net Loss was $(55.9) million, compared to a net loss of $(49.0) million in 2012.

Chegg has a market cap of $521.4 million. Its shares are currently trading at around $6.38 with a P/S ratio of 2.10.

Coca-Cola (KO)

Over the past week three insiders mad buys into the guru-favorite Coca-Cola. These three corporate executives made the first insider buys for the company since March 2013.

Director Maria Lagomasino purchased 7,981 shares of Coca-Cola at the price of $37.57 per share on Feb. 24. She spent a total of $299,846 on this transaction, and since her buy the price per share is up a slight 0.67%. Lagomasino now holds on to at least 23,631 shares of the company’s stock.

Director Ana Botin also added some shares to her stake on Feb. 24. The director purchased a total of 2,500 shares at $37.25 per share. This buy cost her a total of $93,125, and since her buy the price per share is trading up approximately 1.53%. Botin now holds on to at least 2,500 shares of Coca-Cola’s stock.

Lastly Chairman and CEO Ahmet Muhtar Kent purchased the largest amount, adding 10,500 shares to his holdings. The CEO bought these at the price of $37.91 per share for a total transaction amount of $398,055. Since his buy the price per share has dropped approximately -0.24%. Kent now holds on to at least 597,616 shares of the company’s stock.

1394035495116.png

Coca-Cola is a beverage company. It owns or license and market more than 500 nonalcoholic beverage brands, mainly sparkling beverages but also a variety of still beverages such as waters, enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks.

Coca-Cola’s historical revenue and net income:

1394035516894.png

The analysis on Coca-Cola reports that the revenue has slowed over the past year, they have issued $14.4 billion of debt over the past three years and its P/S, P/B and P/E ratios are all trading at historical lows.

The Peter Lynch Chart suggests that the company is currently overvalued:

1394035539359.png

Coca-Cola has a market cap of $168.31 billion. Its shares are currently trading at around $38.20 with a P/E ratio of 19.80, a P/S ratio of 3.66 and a P/B ratio of 5.20. The company had an annual average earnings growth of 9.30% over the past ten years.

GuruFocus rated Coca-Cola the business predictability rank of 5-star.

Kinder Morgan (KMI)

This past week Kinder Morgan continued their trend of insider buying as two corporate executives made buys on Feb. 24. The two insiders added over 200,000 shares to their holdings as the share price sits at its 52-week low.

Chairman and CEO Richard Kinder made the largest buy of the week adding 199,165 shares to his position. The CEO bought these shares at $32.09 per share for a total transaction amount of $6,391,205. Since his buy the price per share has dropped a slight -0.75%. Kinder now holds on to 243 million shares of his company’s stock, making him the largest individual shareholder of the company.

Vice President Dax Sanders added a much smaller 1,000 shares to his stake on Feb. 24. The insider bought these at $32.35 per share for a total transaction amount of $32,350. Since his buy the price per share is down about -1.55%. Sanders now holds on to at least 266,499 shares of the company’s stock.

1394035558320.png

Insider buying has increased for the company since the price has dwindled down from its previous 10-year highs.

Late last year VP of HR and Administration James Street made several buys as did Director Fayez Sarofim. To read more about their buys, check out Kinder Morgan’s Insider Trades’ page.

Kinder Morgan is engaged as the energy transportation and storage companies in North America. Kinder Morgan is the largest midstream and the third largest energy company (based on combined enterprise value) in North America.

Kinder Morgan’s historical revenue and net income:

1394035595491.png

The analysis on Kinder Morgan reports that the revenue has been in decline over the past three years, it has issued $4.8 billion in debt over the past three years and the dividend yield is nearing a three-year high.

The company recently announced that its collaborative project with Valero Energy (VLO) is now fully operational and is transporting petroleum products from refineries in Louisiana to Mississippi.

The company recently announced its financial expectations for 2014 which reports the company’s expectations to:

  • Generate approximately $6.4 billion in business segment earnings before DDA, an increase of about $750 million over the 2013 forecast.
  • Distribute over $2.5 billion to its limited partners.
  • Invest approximately $3.6 billion in expansions and small acquisitions.
  • Almost $720 million of the equity required for the investment program is expected to be funded by KMR share dividends.
Kinder Morgan has a market cap of $32.66 billion. Its shares are currently trading at around $31.69 with a P/E ratio of 35.30, a P/S ratio of 2.90 and a P/B ratio of 2.49. The dividend yield of Kinder Morgan stock is 5.00%.

Check out more insider trades at 52-week lows by using the GuruFocus All-in-One Screener.

Try a free 7-day premium membership trial here.


Rating: 4.3/5 (4 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK