Monthly Newsletter – Page 2 – Daily Stocks News

Stocks with Recent Insider Buying – GCO, MGI, MEI

The first half of 2012 was mixed for the U.S. equity market. While all three major indexes posted significant gains in the first three months of 2012, the second quarter was disappointing.
Issues such as the euro zone debt crisis and concerns over a global economic slowdown weighed down sentiments during the second quarter of 2012. The second quarter also saw extreme volatility.
Looking ahead, a lot of uncertainty still remains as we enter into the second half of 2012. Although European leaders have announced some key measures at a recent European Union summit to tackle the euro zone debt crisis, a great deal of uncertainty still remains. Meanwhile, recent economic data from China, euro zone and U.S. has been disappointing. Also, adding to the uncertainty is the upcoming Presidential election in the U.S.

In such an environment, investing in equity market could be difficult. However, investors can still find some stocks that can earn significant returns in the medium- to long-term. How do you find such stocks?

One great way is to look for stocks that have seen significant insider buying activity. When company insiders buy shares, it is a sign of confidence in that company’s long-term prospects. In this article, we will take a look at a few stocks that have seen some insider buying activity in the recent past.

First up is Opko Health Inc. (NYSE: OPK), a multinational pharmaceutical and diagnostics company engaged in the development of a range of solutions to diagnose, treat and prevent various conditions. According to a recent SEC filing, Phillip Frost, Opko Health’s Chairman and CEO, bought 45,000 shares of OPK common stock for $4.71 per share.

OPK shares are currently trading at $4.67. Year-to-date, the stock has fallen 4.69%, underperforming the broad market.

Opko Health last month entered into a definitive agreement to acquire a 45% stake in a private Israeli company that produces a third-generation hepatitis B vaccine. OPK bought the stake from FDS Pharma LLP.

Genesco Inc. (NYSE: GCO), a retailer and wholesaler of footwear, apparel and accessories, also saw some insider buying activity recently. According to a SEC filing, Thurgood Marshall Jr., a director at Genesco, recently bought 3,600 shares of GCO common stock at $58.75 per share for a total investment of $211,499.

This is the first time in the past year, Marshall Jr. has bought shares of GCO.

Genesco shares are currently trading at $61.81. Year-to-date, GCO shares have gained 0.11%, underperforming the S&P 500.

For the first quarter ended April 28, 2012, GCO reported earnings from continuing operations of $20.8 million, or $0.86 per diluted share, compared to earnings from continuing operations of $15 million, or $0.63 per diluted share reported for the first quarter ended April 30, 2011.
GCO’s adjusted earnings from continuing operations were $23.8 million, or $0.98 per share, compared to $15.7 million, or $0.67 per share reported for the same period last year. Net sales for the first quarter rose 25% to $600 million.

Based on the strong first-quarter results, GCO also raised its guidance for fiscal 2013. The company now expects adjusted earnings per share for fiscal 2013 to be between $4.70 and $4.82.
Next on the list is Moneygram International Inc. (NYSE: MGI), a global payment services company offering products such as global money transfers, bill payment solutions and financial paper products. A recent SEC filing showed Steven Piano, Executive Vice President, Human Resources at Moneygram, bought 280 shares of MGI common stock at $14.58 per share.

MGI shares are currently trading at $15.46. The stock has fallen 12.9% so far this year, underperforming the S&P 500.

For the first quarter of 2012, Moneygram had reported total revenue of $318.1 million, representing an increase of 8% over the same period last year. The company’s total fee and other revenue rose 9% to $314.9 million in the first quarter.
MGI’s adjusted EBITDA for the first quarter ended March 31, 2012 was $68.4 million, representing an increase of 13% over the same period last year. Net income for the first quarter was $10.3 million.

For the full year 2012, MGI expects total revenue growth of 7% to 9%. Adjusted EBITDA for the full year is expected to grow between 9% and 11%.

The final company on the list is Methode Electronics Inc. (NYSE: MEI). Based in Chicago, Illinois, Methode Electronics is a global designer and manufacturer of electro-mechanical devices.
According to a SEC filing, Donald W. Duda, President and CEO of Methode Electronics, recently bought 3,860 shares of MEI common stock at an average price of $8.5 per share. Duda is not the only insider who bought shares in the company recently. CFO Douglas A. Koman also bought 3,616 shares of MEI common stock at an average price of $7.95 per share.

MEI shares are currently trading at $8.50. Year-to-date, the stock has gained 2.53%, underperforming the S&P 500.

The insider purchases at MEI came a few days after the company reported its fourth-quarter financial results.

For the fourth quarter ended April 28, 2012, MEI reported net sales of $126.4 million, up from $119.4 million reported for the same period last year. Net income for the quarter was $5.8 million, or $0.15 per share, compared to $10.1 million reported for the same period last year. Excluding one-time items, the company’s net income for the fourth quarter was $6 million.

For the full fiscal year, MEI reported net sales of $465.1 million, compared $428.2 million reported for the previous fiscal year. Net income for the full fiscal year was $8.4 million, or $0.22 per share. Excluding one-time items, MEI’s net income for fiscal 2012 was $18.7 million, or $0.49 per share.

For fiscal 2013, MEI expects revenue to be between $495 million and $525 million. Earnings per share for the fiscal year are expected to be between $0.52 per share and $0.67 per share.
So these were some of the companies that saw some significant insider buying activity in the recent past. We recommend investors always keep an eye on insider buying activity.

3 Stocks with Insider Buying (USB, HBAN, LUV)

A great way to find out what is going on with a company is by checking if there have been any insider transactions i.e. whether there has been buying or selling of the company’s shares by senior management or directors.

Although corporate insiders may sell shares in their companies for a number of reasons, there is generally only one reason when they buy shares; they are bullish about the company’s outlook.

Corporate insiders have much more knowledge about their respective industries than ordinary investors. And of course, they know more about their own companies than investors. So when they are putting their own money at stake by buying shares in their respective companies, it is generally a good sign. Therefore, it is always useful to keep a track of insider buying activity as you can find some useful long-term investments.

This week, we will look at 3 stocks that have seen significant insider buying activity in the recent past.

First up is U.S. Bancorp (NYSE: USB), the Minneapolis, Minnesota-based multi-state financial services holding company providing a range of financial services.

The Vice President and General Counsel of USB recently bought 8,000 shares at $25.52 per share.

USB has been one of the top performing financials this year. The stock has also outperformed the S&P 500, gaining 17.07%, compared with S&P 500’s 9.10%. USB currently has a market capitalization of 60.20 billion. The stock has a dividend yield of 2.46%.

Recently, the bank also released its first-quarter financial results, posting a 28% increase in net income for the quarter. USB reported net income of $1.338 billion for the first quarter. The bank’s first-quarter earnings were driven by year-over-year increase in total net revenue and a lower provision for credit losses.

USB also saw strong lending activity during the first quarter, including $28.9 billion of new and renewed commercial and commercial real estate commitments, $2 billion of lines related to new credit card accounts and $25.1 billion of mortgage and other regional originations.

Richard K. Davis, President and CEO of U.S. Bancorp, noted that USB’s first-quarter 2012 results clearly demonstrate that the momentum, the company has established and built over the past several years is continuing to drive performance in 2012.

U.S. Bancorp is not the only regional bank that has seen significant insider buying activity in the recent past. Huntington Bancshares Incorporated (NASDAQ: HBAN), the Columbus, Ohio-based multi-state diversified regional bank holding company, has also seen some insider buying recently.

Stephen D. Steinour, President and CEO of HBAN, on April 23, bought 18,150 shares of the company’s common stock at $6.42 per share. The purchase came a few days after Steinour bought 10,000 shares of HBAN common stock at $6.54 per share.

Daniel B. Benhase, Senior Executive Vice President at Huntington National Bank, also bough 5,000 shares of HBAN common stock at $6.51 per share recently. James Dunlap, also a Senior Executive Vice President, bought 3,000 shares at $5.44 per share.

HBAN shares, like USB, have also outperformed the broad market this year. Year-to-date, HBAN shares are up 18.03%. HBAN currently has a market capitalization of $5.61 billion.

The purchases from senior executives at HBAN came a few days after the bank released its first-quarter results. HBAN reported first-quarter net income of $153.3 million, or $0.17 per share, representing an increase of 21% over the same period in the previous year.

HBAN’s return on average assets rose from 0.92% in the fourth quarter of 2011 to 1.13% in the first quarter of 2012. Net interest margin for the quarter was 3.40%, up 2 basis points from the fourth quarter of 2011.

CEO Steinour said that by staying focused on executing its strategic plan, HBAN is making steady progress in improving long-term profitability and adding to its earnings growth opportunities. Steinour noted that the first-quarter’s financial results contained two significant items; the first was a gain relating to HBAN’s recently announced FDIC-assisted purchase of Fidelity Bank in Dearborn, Michigan, and the second was an addition to HBAN’s litigation reserves. He added that when looking at the performance adjusted for these significant items, revenue is meaningfully higher with noninterest expense, after considering seasonal FICA and other payroll taxes, basically unchanged.

The final company on our list of 3 stocks with insider buying is Southwest Airlines Co. (NYSE: LUV), operator of a passenger airline.

Although shares of Dallas, Texas-based company have fallen 5.37% this year, it seems that insiders see some potential upside. On April 24, Southwest Airlines Director, Douglas H. Brooks bought 5,000 shares of LUV common stock at $7.90 per share. The purchase was the first one filed by Brooks in the past twelve months.

The purchase came a few days after Southwest Airlines released its first-quarter financial results. The airline reported first-quarter net income of $98 million, or $0.13 per share, compared with net income of $5 million, or $0.01 per share reported in the first quarter of 2011. Excluding one-time items, LUV reported net loss of $18 million, or $0.02 per share for the quarter, compared with a net income of $20 million, or $0.03 per share reported for the same period in the previous year.

Gary C. Kelly, Chairman, President and CEO of Southwest Airlines, said that despite a modest loss, excluding special items, LUV’s first-quarter results were notable, with outstanding revenue production, and except for jet fuel, better-than-expected operating costs. Kelly noted that record first-quarter revenue results were produced with strong revenue management and network optimization, along with benefits from the AirTran acquisition and All-New Rapid Rewards.

Kelly also said that the first quarter marked another important milestone in the integration of AirTran with the approval by the Federal Aviation Administration (FAA) of the Single Operating Certificate.

So these are our 3 stocks that have seen significant insider buying in the recent past. Of the three, HBAN and USB have already made significant gains this year, outperforming the broad market. The recent insider buying activity suggests that there could further upside.