2 Stocks with Heavy Insider Buying

03/10/2011 5:01 am EST


These two companies recently reported better-than-expected earnings, and with insiders snapping up shares, it seems the outlook for the companies—and their stocks—is quite positive. 

By the Staff at Kapitall.com 

Today we highlight a pair of stocks that have recently increased earnings guidance, and in addition, have seen significant insider buying over the last six months. For each company, we'll list the number of shares purchased by insiders. 

As you'll see, the insiders seem to be very enthusiastic about the prospects for their employers, which leaves the rest of us to wonder if they know something we don't. 

ValueClick, Inc. (VCLK): Advertising agencies industry 

  • Market cap of $1.19 billion
  • Recently guided Q1 at $0.16-$0.17 versus estimates of $0.17
  • Over the last six months, shares held by insiders increased by 674,680 (represents a change of 180.1% in insider ownership) 

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Other highlights: The company outperformed analyst earnings estimates during the most recent quarter, suggesting that the analyst community is underestimating the stock. The company reported earnings per share of $0.26, and exceeded the first call consensus of $0.23 (Q4 earnings on Feb. 15). The company also outperformed analyst estimates over the last year, reporting earnings per share at $0.71, beating the consensus view at $0.67 (based on the estimates of five analysts).

Black Box Corp. (BBOX): Networking and communication devices industry

  • Market cap of $638.65 million
  • Recently guided full-year 2011 at $3.34-$3.39 versus estimates of $3.33
  • Over the last six months, shares held by insiders increased by 25,000 (represents a change of 42.5% in insider ownership)

After a solid performance over the last year, BBOX has pulled back during recent sessions. The stock is 4.32% below its 20-period simple moving average (SMA) and 3.54% below its 50-period SMA, but it remains 10.1% above its 200-period SMA.

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Other highlights: The company's stock appears to be undervalued relative to book value. Price/book ratio is at 0.89, much lower than the industry average of 3.95.

By the Staff at Kapitall.com

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