Looking at under-the-radar stocks with solid insider buying activity is a solid move in any market. Indeed, such trading activity can signal management’s sentiment about said company and its underlying shares. In essence, if insiders of a company buy substantial amounts of its stock, it is a good indication that the company’s underlying performance is better than the market’s expectations, or insiders have good reason to believe that the company will perform better. This could potentially provide investors with big gains, as share prices rise in line with insiders’ expectations.
With that said, here are three under-the-radar stocks that insiders are buying right now.
| RILY | B. Riley Financial | $41.01 |
| GBNY | Generations Bancorp NY | $8.71 |
| ASAN | Asana | $25.03 |
B. Riley Financial (RILY)
B. Riley Financial (NASDAQ:RILY) is among the under-the-radar stocks insiders are heavily loading up on. Indeed, I think retail investors should follow suit.
Why?
Well, the current entry point for this stock is fantastic. Its diversified nature as a financial services company has led to solid revenue and earnings growth. And, there’s the company’s generous dividend policy. Notably, RILY stock currently offers investors a whopping 10.3% dividend yield, as of the time of writing.
Of course, B. Riley is a company with its fair share of challenges and risks. The company reported negative earnings per share of $4.96 over the past twelve months, mainly due to impairment charges and goodwill write-offs related to some of its investments. The company’s stock price has also been under pressure, but has seen a lot of near-term momentum building up. Insiders have bought $27.1 million of RILY stock over the past six months. It’s impressive when you consider that insiders have also sold exactly $0 worth of said shares.
Notably, I think all the known risk factors with this company are already priced in. That’s not to mention the company’s strong liquidity buffer of $4.2 billion, which is enough to digest any headwinds and more. Furthermore, the company has been expanding its investment banking capabilities by hiring seasoned professionals in key sectors, such as aerospace and defense, which could boost its revenue and market share in the future.
Accordingly, I think that B. Riley is a compelling buy at these levels, especially for income-oriented investors who can enjoy the high dividend yield while waiting for the stock price to recover. With a calmer banking scene, B. Riley could deliver substantial gains in the long term.
Generations Bancorp NY (GBNY)
Generations Bancorp NY (NASDAQ:GBNY) is a bank holding company that operates through its subsidiary, Generations Bank, which provides personal and business banking products and services in New York. The stock has taken quite the beating during the banking crisis this year and still has a long way to recover. The price-to-projected free cash flow with this stock is just 0.16, better than 85.3% of its peers.
Of course, Generations Bancorp NY is not without risks. The company faces intense competition from other banks in its market. However, this is among the banks in adequate financial health, according to SimplyWallSt, which gives it a score of 5 out of 6 on its financial health metric. The company has a low assets-to-equity ratio of 10.4-times, and 96% of its liabilities are made up of low-risk funding sources. These numbers indicate that the company can manage its debt obligations and withstand potential losses.
The insider buying here hasn’t been significant in terms of dollar terms, but compared to its size, it’s still noticeable. Two of the company’s directors, its board chairman, the senior vice president and chief information officer, its president, and the CEO bought the stock this week.
Asana (ASAN)
Although this is a rather well-known stock, what isn’t very well-known is that Asana (NYSE:ASAN) has solid insider buying from its CEO, and the stock is starting to take off. The company is headed by Facebook co-founder Dustin Moskovitz, and he has been investing heavily into Asana, so far as to take his ownership of the company up to 58.3%, as per Fintel.
I have stated in my previous articles that the bearish argument about Asana’s lack of profitability falls apart when you take into account its CEO. Dustin Moskovitz has deep pockets and can pull Asana out of any financial troubles, if need be.
Regardless, I doubt that will happen as the company is on stable footing. Once Wall Street becomes more comfortable with growth companies in the marketing sector, I believe this stock will deliver tremendous upside.
Insiders have bought (net) $352.7 million in ASAN stock over just the past year.
On the date of publication, Omor Ibne Ehsan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
