Like most Fools, I love to see managers and other insiders owning shares of their companies. While many factors must be evaluated before buying a stock, it is always reassuring to see that individuals with the most intimate knowledge of a business have "skin in the game." An even more bullish indicator is buying by insiders. So I decided to take a closer look at stocks with some of the biggest insider purchases over the past week.
|
Company
|
Market Cap
|
No. of Shares Purchased
|
Value of Shares Purchased
|
|
Sun Bancorp (Nasdaq: SNBC )
|
$143 million
|
1,587,786
|
$6.4 million
|
|
Winthrop Realty Trust (NYSE: FUR )
|
$330 million
|
198,400
|
$2.4 million
|
|
Hypercom (NYSE: HYC )
|
$356 million
|
180,703
|
$702,000
|
|
Heico (NYSE: HEI-A )
|
$1.29 billion
|
20,000
|
$665,000
|
Sources: Barron's; Capital IQ, a division of Standard and Poor's.
New Jersey-based Sun Bancorp saw buying from members of the Brown family, its founders. The Browns participated in a deal to invest $100 million in the bank alongside Wilbur Ross' private equity fund and other investors. Ross will get a seat on the company's board, while Sun Bancorp will improve its capital position and now has funds for expansion. Ross' involvement may point to industry consolidation, as the Michigan and Florida banks he has invested in have subsequently purchased the assets of other struggling banks.
At Winthrop Realty Trust, CEO Michael Ashner bought shares in a public offering of shares priced at $12.25 each. The REIT currently has a 5.3% yield and sports the maximum five stars in CAPS. Winthrop's efforts to gain control of the massive Stuyvesant Town-Peter Cooper Village apartment complex in New York City were recently thwarted.
Hypercom, maker of credit card swiping machines seen at your grocery store and everywhere else, saw buying from shareholder Alex Meruelo, who owns 14% of the company. More interestingly, Hypercom is the target of a hostile takeover bid from competitor Verifone Systems (NYSE: PAY ) . Hypercom rejected Verifone's bid for the company Thursday, but I'll bet that won't be the end of this story.
At Heico, an aerospace and defense firm, its CEO, co-presidents, and five of its directors bought Class A shares of the company. Heico has two classes of stock with equal economic rights, but the Class A shares have one-tenth the voting rights of Heico (NYSE: HEI ) regular common stock and currently trade at a 25% discount. When Heico reported quarterly earnings in August, it beat analyst expectations, and both share classes saw nice pops. Maybe management thinks there will be more earnings beats in the quarters ahead, or that the A share discount is too wide?
While these companies are not specific recommendations, insider buying can be a bullish indicator, and looking at where insiders are placing their bets can be a good way to find new ideas for your portfolio.
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