[Editor’s Note: This article is updated each week with the latest insider moves.]
Insider buying can be a bullish signal for a stock. Insiders are people who have confidential information about a company. And among those working for a company, the chief executive officer is the ultimate insider. They probably have access to more of this type information than anyone else.
Over the years, there have been many instances where insiders took advantage of this information by using it to profit at the expense of uninformed investors. For example, if an insider is aware of some soon-to-be-released information that will make the stock go higher, they can buy shares from someone who doesn’t know. If the news is going to be bad, the insider can sell it to someone else before the price drops.
The SEC has created regulations and laws that protect the public from this type of illicit activity. One of these requires that the insider inform the public when they make a transaction in their company’s stock.
Because of this, we can profit. We can find out when the CEO of a company buys its stock. There are numerous reasons why an insider would sell their stock. They may need to raise money to purchase a residence or pay a divorce settlement. However, there is only one reason why an insider would buy the stock. It is because they believe they will make money. They feel that it is undervalued at current levels.
Here are seven companies whose the CEOs have purchased a substantial amount of shares after the markets recent selloff.
Stocks With Insider Buying: GreenHill & Co. (GHL)
GreenHill & Co. (NYSE:GHL) is an independent investment bank. It is reasonable to think that investment bankers have a great understanding of market valuations. After all, putting valuations on companies is one their primary activities.
The price of GHL stock has fallen by over 50% at points this year.
Greenhill CEO Scott Bok has been with the company for more than 20 years. He must believe that it is undervalued at current levels, and he is backing up this belief with a significant amount of money.
Bok recently bought 139,220 shares at an average price of $14.36. This is a personal investment of $2 million.
Timkensteel (NYSE:TMST) manufactures alloy, carbon and micro-alloy steel products.
The TMST stock price has fallen by over 55% since February. Analysts primarily attribute this drop to concerns over trade wars and a potential economic slowdown. The company also just reported earnings that came in above estimates, but the stock continued to trend lower.
TimkenSteel President, CEO and Chairman Ward Timken must be confident that the selloff is close to an end because he just bought 30,000 shares at $6.15. This is an investment of $185,000.
Kristopher Westbrooks is also an insider of the company. He is the CFO, and he must also believe that the stock is a good buy at these levels. He just purchased 7,350 shares at $6.65.
Southwestern Energy (SWN)
Southwestern Energy (NYSE:SWN) is an independent holding company that is in the natural gas business.
Like most companies in the natural gas industry, Southwestern has seen a significant fall in the price of its shares. They have dropped by about 60% — the high in April was around $4.80 while the most recent close was $1.85.
President and CEO William Way believes that things will soon be turning around. He just made a personal investment into the company of almost $200,000 as he purchased 10,000 shares at $1.91.
Matador Resources (MTDR)
Matador Resources (NYSE:MTDR) is a holding company that engages in the exploration and development of oil and natural gas resources.
Like Southwestern and other companies in the natural gas industry, this company has seen a large decline in its shares. In just one month the price of MTDR stock has dropped from $19.80 to $15.35.
Matador Chairman and CEO Joseph Foran apparently believes that the stock is an attractive buy at current levels. Foran just used his personal money to buy 8,000 shares. He paid an average price of $15.05 shares which is an investment of $120,000.
Manning & Napier (MN)
Manning & Napier (NYSE:MN) is an independent investment management company.
In January, MN stock was trading at over $2.30 per share. By the end of August, it dropped to less than $1.50 a share, though it has since recovered somewhat. The most recent close was $1.72.
Manning & Napier CEO Marc Mayer, an industry veteran with more than 30 years of experience, joined the company in January. He must believe that the future looks bright, because he just bought $150,00 worth of stock.
Edward Pettinella is also an insider of the company. He is a director and just paid $1.85 for 22,400 shares.
Hanesbrands (NYSE:HBI) designs, manufactures, and sells innerwear and activewear.
Over the past two months, the price of HBI stock has dropped by about 15%. Some analysts attribute this drop to ongoing concerns over trade wars.
Gerald Evans is the CEO of Hanesbrands. He has been an officer of the company since 2006, so it is reasonable to assume that he may have some valuable insights.
He must believe that the concerns are not justified because he just invested a significant amount of money into the stock.
Evans just paid $14.73 for 10,000 shares, an investment of nearly $150,000.
Cars.Com (NYSE:CARS) provides automotive products and services through online classifieds.
CARS stock dropped by more than 24% when they reported earnings that were short of estimates.
Thomas Vetter is the CEO and President of Cars.com. He must believe that the selloff was an extreme overreaction. He just invested $200,000 of his personal money when bought 20,000 shares at $10.19.
Other insiders also believe that CARS stock is a good value that this level. Michael Kelly is a director of the company. He recently bought 2,500 shares at $9.94. James Rogers is the chief legal officer. He invested $100,000 when he paid $9.99 for 10,000 shares.
As of this writing, Mark Putrino did not hold a position in any of the aforementioned securities.