2 Stocks with Heavy Insider Buying
Brian is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
One of my favorite screening tools is to see stocks with notable insider buying. The reasoning is simple as insiders sell for many reasons (diversify one’s assets, pay for the new house, expensive trip with the family, unfortunate divorce settlement costs, etc.), but they buy only for one reason: to make more money. Therefore, these two stocks caught my eye with their recent heavy insider buying.
Exco Resources (NYSE: XCO) is an independent oil and gas company based in Dallas. Over the past month, XCO has notable insider buying on Dec. 14 with Oaktree’s collective funds purchasing 6 million shares and on Dec. 22-28, WL Ross & Co. buying collectively buying just over 1.57 million shares.
This is some serious buying and looks to be the right time as XCO is sitting right near its 52-week low and trading at a reasonable 18x trailing P/E, 12x forward P/E, .6x PEG, 1.2x P/B, and 1.6% dividend. I think with this very encouraging insider buying, XCO is a quality buy along with two other energy names I brought up recently: ExxonMobil (NYSE: XOM) and Chevron (NYSE: CVX).
NII Holdings (NASDAQ: NIHD) provides wireless communications under the Nextel brand name to businesses and individuals throughout Central and South America. Over the past month, NIHD has had some strong insider buying, starting on Dec. 9 by its president of Nextel Brazil purchasing 38,770 shares, followed by the EVP of General Counsel purchasing 5,000 shares on Dec. 22, and the EVP and CFO buying 3,500 shares, and the president of Nextel Argentina purchasing collectively just under 15,000 shares between Dec. 27-28.
This is very encouraging seeing a wide array of insiders purchasing more of their stock and I can see why as it sits right near its 52-week low. Trading at just a 12x trailing P/E, 11x forward P/E, .5x P/S, .7x PEG, .8x EV/S, 1.1x P/B, and just over 3x EV/EBITDA makes NIHD a quality international holding in my opinion.
Moreover, for the income investor, I’ll reiterate other telecommunication stocks I recently mentioned that still have my interest: AT&T (NYSE: T), Verizon (NYSE: VZ), and CenturyLink (NYSE: CTL).
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