Is it Time to Jump into These Stocks?
Ali is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Investors are typically always on the hunt to find stocks that outperform the general market. In these turbulent times, that is much easier said than done. However, one screening tool that has proven to be effective in determining whether a stock is moving higher is insider buying due to one simple reason: they buy stocks, just like us, to make more money. In addition, they arguably have the best view of the company being a part of the day-to-day operations and/or have a large investment of their own which they like to see increase in value. Below are a couple stocks with notable insider buying.
Arbor Realty Trust (NYSE: ABR) is a REIT (real estate investment trust) focused on investing in multi-family and commercial real estate related assets including bridge loans, discounted mortgage notes, and mezzanine loans. On June 18-19, there was notable insider buying by the Chairman, President, and CEO Ivan Kaufman buying collectively 30,000 shares bringing his total ownership stake in the family trust to 75,000 shares. This is always a bullish sign when owners substantially raise ownership in their company through the open market. Moreover, with lending in the commercial real estate market expected to stay tight in the foreseeable future, Arbor Realty should continue to get favorable rates on their investments. Furthermore, after having not paid a dividend for the last two years, the company reinstated it last quarter. Fellow Commercial REIT Vornado Realty (NYSE: VNO) (NYSE: SPG) and its 3.3% dividend yield is also worth a look along with Simon Property Group (NYSE: SPG) and it’s nice 2.6% dividend yield to go with its geographically diverse revenue base.
Brocade Communications Systems (NASDAQ: BRCD) engages in Ethernet networking and storage area networking solutions. On June 13, CEO Michael Klayko bought a sizeable 60,000 shares bringing his total ownership of BRCD in his Living Trust to 778,277 shares. The stock has been rather surprisingly range bound the past 52 weeks, currently stuck under $5/share while beating consensus earnings estimates the past four quarters. Moreover, the company looks to have a compelling valuation trading at just 1x Price/Book and Price/Sales, along with a comparatively cheap .85x Price-To-Expected-Growth-Rate. With the favorable valuations, strong insider buying by its CEO, and healthy free-cash-flow, I think BRCD is worth a look for the more aggressive investor.
As always, respectful comments and questions are always welcome on the message board below and please know any viewpoints are simply just the opinion of the blogger. I always strongly recommend every investor to do follow-up research and due diligence for the sake of their financial health.
Prohomes has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.