Advanced Drainage Systems
Mark Haney, director at Phillips 66, bought 20,000 stocks in July last year at $23 just in time to watch the price triple to $69.21. Well Mr Haney has been at it again and has just bought $188,000 of stocks in Advanced Drainage Systems Inc (WMS, Financial) where he also holds a directorship. The next day Director Richard Rosenthal also purchased $30,000 of stock.
Advanced Drainage Systems is the leading manufacturer of corrugated pipe and drainage solutions for the construction industry with 48 plants and 19 distribution centres in the US. The company has struggled since the great recession as public works expenditure has dried up and residential construction was postponed or cancelled. However recent results have shown a strong improvement with first quarter earnings per share growth of 47% on the back of 10% sales growth. The company raised forecasts for the full year and now expects revenue growth of 15%. Further CEO Joe Chlapaty told investors at a conference this week that he believed the company would benefit significantly from the growing shale gas industry.
Analyst forecasts point to 5 year EPS growth of over 20%. Deutsche Bank initiated coverage last week with a “Buy” rating and a target price of $24 representing 18% upside on Fridays close. (read full report)
Accuride
Accuride is a leading supplier to many of the world’s largest truck and bus manufacturers including Daimler, Navistar and Paccar.
With the economy improving, US for hire truck tonnage is nearing all time highs and carriers are reporting good volumes with good growth forecast for the rest of the year. Paccar recently reported second quarter results with revenue up 6.3% on last year.
Accuride has been focussed on its strategy to “fix and grow” meaning reduce costs and grow revenue. The strategy appears to be working with the company beating expectations by a significant margin in the last three quarters. The company returned to profitability in the second quarter with earnings per share of $0.11 compared to a loss of $0.11 last year and consensus forecasts of breaking even $0.00. Consensus forecasts for the next five years point to annual growth of 36%.
Director John W. Risner purchased 10,000 shares on September 5th at an average price of $4.33 per share in a transaction totalling $43,300. Zachs recently upgraded the stock from Neutral to Outperform and confirmed a Target Price of $5.90 represent 30% upside on Friday’s close. (read full article)
Stonegate Mortgages
Trading on 5.4 time 2015 forecast earnings, Stonegate Mortgages is a financial services company focused on US residential mortgage market.
Revenue and earnings have grown exponentially over the past three years as the housing market has improved.
Director Sam Levinson bought $71,000 as the price dipped below $14 in September following purchases totalling almost $2.4 million in August. Other insiders Robert Eastep (Chief Financial Officer) and Lisa Roger (Execuive Vice President) also purchased in August.
Eight analysts forecast EPS of $2.65 in 2015 with the lowest estimate $1.97 valuing Stonegate on a forward PE multiple of only 7.5. (read full article)
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The author is a blogger for SurgingEarnings.com
Risk Disclaimer: This article does not constitute a recommendation to buy or sell. Investing in stocks or other securities and derivatives is a high-risk activity and not suitable for everyone. It is strongly recommended that individuals should consult with a SEC-registered investment adviser prior to making any investment decisions.
Disclosure: The author holds no positions in any of the stocks mentioned nor has any intentions to initiate any in the next 72 hours.
