5 Stocks With High Insider Cluster Buys
- By James Li
According to Insider Cluster Buys, a Premium feature of GuruFocus, five stocks that have a high number of unique insider buys over the past several months are Mid Penn Bancorp Inc. (NASDAQ:MPB), First Choice Bancorp (NASDAQ:FCBP), Compass Diversified Holdings (NYSE:CODI), Malvern Bancorp Inc. (NASDAQ:MLVF) and Howard Bancorp Inc. (NASDAQ:HBMD).
Legendary Fidelity Magellan Fund Manager Peter Lynch said that while company insiders may sell their shares for several reasons, insiders buy shares for just one reason: they believe the company stock may increase in value.
GuruFocus' monthly insider buy-sell ratio chart tracks the ratio of the number of insider buys to the number of insider sells for each month. Our research suggests that the trend of insider buy-sell ratios can identify market entry points.
Our research further suggests that stocks that had multiple company directors and executives buying shares have potential for good growth. As such, investors can look for opportunities in stocks where several company insiders have bought shares over the past few months.
The Insider Cluster Buys page tracks both the number of insider buys and the number of unique insider buys. The key difference between these two columns is that the latter indicates the number of different insiders buying shares while the former reports the total number of buy transactions from all insiders over the past several months.
Mid Penn Bancorp
Eight insiders purchased shares in Mid Penn Bancorp (NASDAQ:MPB) over the past three months. The total number of shares purchased across eight transactions is 1,714.
The Millersburg, Pennsylvania-based company provides commercial banking and various other financial services. According to GuruFocus, the company has a Piotroski F-score of 5 and debt ratios that outperform more than half of global competitors.
First Choice Bancorp
Eight insiders purchased shares of First Choice Bancorp (NASDAQ:FCBP) over the past three months. The total number of shares purchased across eight transactions is 18,483.
The California-based bank provides commercial, industrial and residential mortgage loans to individuals and small businesses. According to GuruFocus, the company has a low Piotroski F-score of 3 and debt ratios underperforming over 75% of global competitors, suggesting low financial strength.
Jim Simons (Trades, Portfolio)' Renaissance Technologies has a holding in First Choice Bancorp.
Compass Diversified Holdings
Seven insiders purchased shares of Compass Diversified Holdings (NYSE:CODI) during the past three months. The total number of shares purchased across seven transactions is 36,570.
The Westport, Connecticut-based conglomerate operates two business groups: branded consumer businesses and niche industrial businesses. GuruFocus ranks the company's financial strength 5 out of 10: Although the company has a safe Piotroski F-score of 6 and a Beneish M-score that suggests minimal earnings manipulation, Compass Diversified Holdings has a weak Altman Z-score of 1.78 and an interest coverage ratio that underperforms over 69% of global competitors.
Chuck Royce (Trades, Portfolio)'s Royce Investment Partners has a holding in Compass Diversified Holdings.
Malvern Bancorp
Seven insiders purchased shares of Malvern Bancorp (NASDAQ:MLVF) during the past month. The total number of shares purchased across seven transactions is 2,800.
The Pennsylvania-based bank provides checking and savings accounts, and in turn issues loans for commercial and residential real estate projects. According to GuruFocus, Malvern's equity-to-asset ratio of 0.12 outperforms over 73% of global banks despite debt ratios underperforming over 65% of global competitors.
Howard Bancorp
Seven insiders purchased shares of Howard Bancorp (NASDAQ:HBMD) during the past month. The total number of shares purchased across 11 transactions is 4,338.
The Baltimore-based bank provides community banking, mortgage banking and consumer financial services. According to GuruFocus, Howard Bancorp has a low Piotroski F-score of 3 and debt ratios that underperform more than half of global competitors.
Disclosure: No positions.
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This article first appeared on GuruFocus.
