|
|
B/E Aerospace Sprouts Wings
Posted: Mar 27, 2009 14:30 PM by Glenn Curtis
Monitoring a stock for insider buying can give investors a clue about how the company is viewed from the other side of the board room. An executive of a publicly traded company would not buy up shares absent of the strong possibility that money could be made. Selling, of course, is a different story, but not always a reason to panic. An insider might sell a stock to buy a house, make college tuition payments or diversify his or her portfolio. (To learn more about what selling says about a company, read Insider Selling Isn't Always A Bad Sign.)
IN PICTURES: Top 10 Forex Trading Rules
The following companies recently experienced insider buying action and are expected to turn profits this year. Investors would be wise to conduct further research on these stocks.
|
Company
|
# of insider buyers
(12
wks)*
|
|
1-800-Flowers.com
(Nasdaq:FLWS)
|
11
|
|
B/E Aerospace
(Nasdaq:BEAV)
|
4
|
|
Hanesbrands
(NYSE:HBI)
|
5
|
|
Ruby Tuesday
(NYSE:RT)
|
9
|
|
Wynn Resorts
(Nasdaq:WYNN)
|
3
|
|
Data from Zacks.com on March 25, 2009
|
Flying In Style
Although fuel prices have fallen markedly over the last few months, the near-term demand for travel remains pretty week. A quick look at the share prices of some of the biggest airlines leaves little pause for cheer. UAL Corp. (Nasdaq:UAUA) and Delta (NYSE:DAL) are trading near their 52-week lows. The weak travel environment, caused by a continued reduction in air travel as consumers continue to pinch pennies, may negatively impact companies like Florida-based B/E Aerospace, which manufactures airplane seats, food preparation equipment, oxygen systems, lighting structures and other products.
Insiders at B/E Aerospace, however, think the stock is headed places. Zacks reports four buy transactions for the stock in the past 12 weeks. According to Yahoo! Finance, Edmund Moriarty, an officer at the company, bought a total of 3,000 shares in February and March. In addition, CFO Tom McCaffrey indirectly purchased 4,000 shares in February. Interestingly, insiders also were pretty big buyers back in Q4 2008. This cluster of activity, albeit small, signals a trend, even if slight. In November 2007, insiders were selling the stock while it was trading in the $40 range. In other words, their timing was impressive. But only time will tell if insiders will be on the mark this time around.
Although it trades just under $9, the stock is expected to earn $1.75 per share in 2009 and $1.99 per share in 2010. In other words, the stock trades at just about 5 times the current year's estimate and at about 4.4 times the estimate for 2010.
Finally, Yahoo! Finance reports that B/E Aerospace beat estimates in three of the last four quarters. While this is not a prediction of the future, the company's consistent performance is a strong sign of solid performance in the future.
Bottom Line
Just because an insider buys stock at a company does not necessarily indicate an increase in value of the stock. After all, insiders are human, too, and could be cursed by bad timing, just like the next guy (or gal). However, reviewing companies with insider buying activity can provide clues about the trajectory of a stock - good or bad. (To learn more about insider buying, read Delving Into Insider Investments.)
By Glenn Curtis
Glenn Curtis started his career in the 1990s as an equity analyst for a regional firm in New Jersey. There, he covered companies in the technology, entertainment, and gaming industries. Curtis has since worked as a financial writer at a series of both web and print publications, including TheStreet.com and Registered Rep Magazine. He has held his series 6,7,24, and 63 securities licenses.
Rate this Article:
Your Rating:
Overall Rating:
Vote Now!
MORE STOCK ANALYSIS
 Loading...
THE BEST OF INVESTOPEDIA
Loading...
|
CURRENT HIGH YIELD SAVINGS RATES
Rate data provided by
|
