According to the Insider Cluster Buys Screen, a Premium feature of GuruFocus, five stocks with a high GF Score and high insider buys over the past two months include Ames National Corp. (ATLO, Financial), Warner Bros. Discovery Inc. (WBD, Financial), Bankwell Financial Group Inc. (BWFG, Financial), Northrim BanCorp Inc. (NRIM, Financial) and Herbalife Nutrition Ltd. (HLF, Financial).
Legendary Fidelity Magellan Fund manager Peter Lynch once opined that while insiders may sell shares for several reasons, they typically buy shares only when they think their company’s shares are set to appreciate in value. As such, one method investors can use to look for value opportunities is to screen for companies that have a high GF Score and high insider buys in recent months.
The insider trades are primarily sourced from Securities & Exchange Commission Form 4 filings. Any insider who makes a change to their ownership stake in the company through an open market purchase or sale or through other means like exercising of options or converting of derivative securities must file a Form 4. The deadline for filing is two days.
GuruFocus’ Insider Cluster Screen allows users to view the stocks with high insider buys over a specific period. The “# of Insider Buys” column reports the total number of buy transactions among insiders, while the “# of Unique Insider Buys” column reports the total number of insiders buying shares while counting each insider as one regardless of how many transactions the insider made over the selected time period.
The GF Score has been found to closely align with the long-term performance of stocks based on backtesting from 2006-2021. The combined score ranges from 0 to 100, with 100 as the highest score. Each of the five rankings that make up the GF Score range from 0 to 10, with 10 as the highest score. GuruFocus’ research found out that stocks with higher GF Scores generally produce higher performance than stocks with lower GF Scores.
Ames National
Fourteen insiders purchased shares of Ames National (ATLO, Financial) during the past two months. The total number of shares purchased was 4,726.
Shares of Ames National traded around $22.49 on Wednesday, showing that the stock is modestly undervalued based on Wednesday’s price-to-GF-Value ratio of 0.89.
The Ames, Iowa-based bank holding company has a GF Score of 87 out of 100, driven by a momentum rank of 10 out of 10 and a growth rank of 9 out of 10 despite financial strength, profitability and GF Value rankings of just 6 out of 10.
Gurus with holdings in Ames National include Chuck Royce (Trades, Portfolio)’s Royce Investment Partners and Jim Simons (Trades, Portfolio)’ Renaissance Technologies.
Warner Bros. Discovery
Eight insiders purchased shares of Warner Bros. Discovery (WBD, Financial) during the past two months. The total number of shares purchased was 243,562.
Shares of Warner Bros. Discovery traded around $14.02 on Wednesday, showing that the stock is significantly undervalued based on Wednesday’s price-to-GF-Value ratio of 0.27.
The New York-based media giant has a GF Score of 85 out of 100, driven by a growth rank of 10 out of 10 and a profitability rank of 9 out of 10 despite momentum and financial strength ranking just 5 out of 10 and GF Value ranking just 2 out of 10.
Gurus with holdings in Warner Bros. Discovery include David Einhorn (Trades, Portfolio)’s Greenlight Capital Re Ltd. (GLRE, Financial) and the Smead Value Fund (Trades, Portfolio).
Bankwell Financial Group
Seven insiders purchased shares of Bankwell Financial Group (BWFG, Financial) during the past two months. The total number of shares purchased was 3,420.
Shares of Bankwell Financial Group traded around $31.61 on Wednesday, showing that the stock is modestly undervalued based on Wednesday’s price-to-GF-Value ratio of 0.86.
The Connecticut-based financial services company has a GF Score of 74 out of 100, based on a GF Value rank of 7 out of 10, a rank of 6 out of 10 for profitability and momentum and a rank of 4 out of 10 for growth and financial strength.
Northrim BanCorp
Seven insiders purchased shares of Northrim BanCorp (NRIM, Financial) during the past two months. The total number of shares purchased was 5,413.
Shares of Northrim BanCorp traded around $40.13 on Wednesday, showing that the stock is fairly valued based on Wednesday’s price-to-GF-Value ratio of 0.96.
The Anchorage, Alaska-based banking and mortgage company has a GF Score of 87 out of 100, driven by a growth rank of 10 out of 10 and a momentum rank of 7 out of 10 despite financial strength ranking just 5 out of 10 and profitability and GF Value ranking just 6 out of 10.
Herbalife
Six insiders purchased shares of Herbalife (HLF, Financial) during the past two months. The total number of shares purchased was 78,000.
Shares of Herbalife traded around $23.27 on Wednesday, showing that the stock is significantly undervalued based on Wednesday’s price-to-GF-Value ratio of 0.37.
The international nutrition company has a GF Score of 86 out of 100, driven by a growth rank of 10 out of 10 and a profitability rank of 9 out of 10 despite financial strength, GF Value and momentum ranking just 4 out of 10.
