Beaten-up stocks trading at rock-bottom prices don't generally hold much appeal to investors. Most often, investors gravitate toward the trendy, buzzed-about companies that are already soaring, leaving the bargains in the basement -- and sometimes, that's exactly where these underperforming stocks belong.
But be sure to check for stars in disguise before you relegate anything to the junk pile -- because you don't want to throw away the chance to see some major upside.
If a stock has already been through the wringer, odds are that most of the bad buzz around it has already been priced in. Another negative news item won't likely have much of an impact on its already depreciated value. On the other hand, a single piece of positive info could send its share price soaring.
But remember -- just because a stock is trading lower doesn't necessarily make it cheap. There's a good deal of risk involved when you invest in companies trading near lows, so be sure to proceed with caution.
If you want to find the diamonds in the rough, you'll have to do more than guesswork. That's why we had a look at which underperforming stocks were being snapped up by insider execs.
We figure, they know more about their own companies than anyone else -- so there may be good reason why they're buying while everyone else is selling. Considering the possibility that most of the bad news is already priced into these names, are these stocks being underestimated? (Click here to access free, interactive tools to analyze these ideas.)
|
Company |
Industry |
Performance Over Last Quarter |
Insider Trends (on a Net Basis) |
|---|---|---|---|
|
K-Swiss |
Apparel Footwear & Accessories |
-20.28% |
Insiders purchased 212,000 shares over the last six months (insider ownership increased by 221.9%) |
|
Central Pacific Financial Corp. |
Regional Banks |
-32.29% |
Insiders purchased 7,500 shares over the last six months (insider ownership increased by 42.6%) |
|
Charming Shoppes |
Apparel Stores |
-12.85% |
Insiders purchased 155,000 shares over the last six months (insider ownership increased by 16.6%) |
|
American Superconductor |
Diversified Electronics |
-21.82% |
Insiders purchased 700,000 shares over the last six months (insider ownership increased by 15.9%) |
|
Zep |
Cleaning Products |
-16.07% |
Insiders purchased 22,000 shares over the last six months (insider ownership increased by 8.5%) |
|
Ormat Technologies |
Electric Utilities |
-13.04% |
Insiders purchased 1,757,180 shares over the last six months (insider ownership increased by 6.8%) |
|
Akamai Technologies |
Internet Information Providers |
-31.00% |
Insiders purchased 22,331 shares over the last six months (insider ownership increased by .4%) |
|
Power-One |
Diversified Electronics |
-25.73% |
Insiders purchased 30,000 shares over the last six months (insider ownership increased by .3%) |
|
Stein Mart |
Apparel Stores |
-13.30% |
Insiders purchased 34,727 shares over the last six months (insider ownership increased by .2%) |
|
Union First Market Bankshares Corporation |
Regional Bank |
-21.73% |
Insiders purchased 10,971 shares over the last six months (insider ownership increased by .2%) |
|
Krispy Kreme Doughnuts |
Restaurants |
-17.53% |
Insiders purchased 10,000 shares over the last six months (insider ownership increased by .1%) |
Insider trading data sourced from Yahoo! Finance. List sorted by the change in insider ownership over the last six months.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned above. Analyst ratings sourced from Zacks Investment Research. Note: The numbers on top of items represent the forward P/E ratio, if available.
Kapitall's Eben Esterhuizen and Alicia Sellitti do not own shares of any companies mentioned.
