Written by Rich B. Meier
TopEquityNews.com
Turbulent markets, the type that requires equity pilots to turn on the “fasten your seatbelt” signs can introduce your stomach to your tonsils. The violent twists, snapping up and down make it extremely difficult for investors to focus on the entirely of the trip – fear kicks in and anticipation quickly turns into just “get me out of here safely” – and maybe a few genuflections.
Hold, hope and pray isn’t a strategy, it’s an investment death sentence. Maybe, TEN can answer your prayers with a few insider tips; no, not of the illegal variety, but insider information by proxy.
What do we mean by that You see, when corporate executives of publicly traded companies want to buy or sell their own stock, they have to fill out government forms – all of which is a matter of public record.
Who would know a company more intimately than those responsible for the day to day operations
Like you, insiders sell stock for many reasons. They want to buy a car, a house, pay for college, need money for Vegas, to take profits… however, most folks – especially those “greedy” corporate executives – buy stocks for one reason and one reason alone, let’s say it all together now – TO MAKE MORE MONEY!
While it’s an old Wall Street saying, it still rings true today, “CEOs may lie to your face, but they never lie with their wallets.”
This weekly column will focus on stocks whose management puts their money on the table. However, just buying the stock isn’t enough for us; we are deeper than that! We add another important layer, share repurchases. That means, on two levels, management can’t think of a better place to put their extra benjamins.
The four stocks with recent insider purchases and announced share buyback programs are:
Acuity Brands, Inc. (AYI)
Entegris, Inc. (ENTG)
Itron, Inc. (ITRI)
Sonic Corp. (SONC)
Of this quartet, the most eye catching in our view is Itron, Inc. (ITRI). The President and CEO, Leroy D. Nosbaum, purchased more than $1 million of ITRI. That’s what we call stepping up and backing up the talk with the walk. Mr. Nosbaum’s buy ticket coincides with a repurchase program of up to $100 million announced on October 26th.
Fundamentally, Itron matches up well with its peers. The average Scientific & Technical Instruments company trades at almost an 18 P/E, ITRI has a forward P/E of only 9.34. Itron shares are valued at 62 cents for every dollar per share they do in sales, roughly a 50% discount to the industry group’s 1.38 price-to-sales. Revenue growth and its PEG ratio are on par; however, we would like to see management be more efficient with cash to improve ROI and ROE.
According to our interpretation of ITRI’s stock chart, the timing of the insider purchase and buyback could be on target too. The stock recently bottomed out at $27.50 after reaching $65 earlier in the year. Volume surged as the stock price recovered and the short-term moving averages are about to pass the 50 day-average. A technical buy signal sure to be picked up by many of Wall Street’s computerized trading models.
Just remember, insiders are not allowed to sell stock for six months after purchase. So, it might take a while for Mr. Nosbaum’s $1 million rationale to be obvious. Keep this in mind when the seatbelt lights ding on as the market zigs when you are expecting a zag.
$101 Million Reasons You Should Consider This Stock is an article from: 
