3 Rebounding-Stocks After Corporate Insiders Bought With Both Hands
by, 8th-July-2016 at 12:48 PM (868 Views)
Shares of the Welshpool-based mining services provider with operations in Australia and Brazil have been up-trending throughout 2016, after two years of sustained weakness. Company insiders seem to have got it right so far – insiders bought nearly 19.3 million shares in the company over the last three months while only 9.1 million shares were sold by them.
MACA generates most of its revenues from clients in the mining and resources industry. The historic drop in commodity prices, with supply far exceeding the demand, reflected in the company revenues falling to $490.2 million for 12 months through December 2015 compared to $601.4 million for the fiscal year 2015. Going forward, revenues are expected to stabilize slightly above the $450-million-mark.
With no debt on its balance sheet, the 12% dividend yield appears to be a good reason for buying shares. At the current number of outstanding shares, the dividend payout amounted to $33.7 million for 12 months to December 2015, which far exceeds projected income of nearly $25 million in fiscal years 2017 and 2018; however, the company can maintain the dividend payout for a while with $109 million cash in hand.
Primary Health Care [ASX:PRY]
Apart from a wide network of medical and pathology centres, the company also provides healthcare technology solutions to health professionals. PRY has been a consistent performer in terms of revenue growth and steady profit margins. One of the top performers this year, PRY had its market capitalization cut to less than half between May 2015 and February 2016.
In that epic fall, much to blame was the substantially high value of goodwill on its balance sheet which investors did not find reasonable amid profit warnings, a reduction in tax rebate and risks of stagnant growth in revenues related to Medicare rebates.
However, when a steady performer is beaten down to that extent, it’s not surprising that the insiders, all corporate, were buying with both hands over the last six months – net buying of nearly 180 million shares, which is nearly 34% of the total outstanding shares. Insiders have done really well so far – the stock is up nearly 80% from its 52-week low, made in February this year.
Super Retail Group [ASX:SUL]
Formerly known as Super Cheap Auto Group Limited, the company retails auto, leisure and sports products in Australia and New Zealand. Recently, several corporate insiders, including Goldman Sachs and UBS Asset management, made substantial purchases, which ended up in net buying of nearly 128 million shares. To put it in perspective, as per the latest data, the count for total outstanding shares stood at 197.2 million.
SUL has delivered a consistent revenue growth over the last five years while maintaining a healthy gross profit margin between 43% and 45%. Despite weakness in household goods sales as first-home buyers’ demand fades, the fact that retail spending was 3.7% higher year-over-year – as per the latest Mastercard SpendingPulse Report – for the month of May is a positive indication for the company’s leisure and sports segments.
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