While investors are attempting to wrap their heads around the volatility over the past week in trading and decide whether it’s safe to snap up bargain bin stocks, many of the big wigs have already begun to buy. C-level executives and big time buyers have a long history of well-timed purchases, especially when it’s in shares of their own stock. Following their lead isn’t always fool proof, but the purchase of stock by an executive, especially in large volume, usually indicates they have some insight the average investor does not.
Considering the lack of directional indicators presented by the current market, trusting the moves of an insider may the equivalent of trusting the direction of the North Star when lost in the woods.
Among the companies with insiders snapping up shares are
Deere & Co (DE)
Deere has had a strong year as increased demand for corn led to a desire for higher yields and new, better equipment to manage crops. Like many other stocks, it has taken a hit in recent trading, down over 20 percent since April. There is one big name investor; however, who believes the same factors that drove up shares originally still stand and will help to pull prices to their previous highs and beyond. That investor is Microsoft (MSFT) Founder, Bill Gates. As of August 5th, Cascade, Gates’ investment vehicle, said that it owned 21 million shares in the company, or 5 percent of the outstanding stock.
Chiquita Brands International Inc. (CQB)
Fernando Aguirre the chief executive officer of Chiquita Brands International has spent around $1.16m on 133,000 shares in the company over the past week alone. The market decline has driven down shares of Chiquita to attractive levels but there could be more to it than that. Bananas, plagued with two fungal viruses will perhaps be extinct in the next ten years. French scientists have cautioned that without swift action there may be no bananas in a decade. Whether the lessened availability will drive up prices or Chiquita has some type of secret fix is unknown but its possible Aguirre has some insight into this situation that prompted his purchase. It’s also possible that he doesn’t but shares are headed higher for another reason.
Either way, Brian Kocher, a European executive at the company also began buying more shares in the past week, though on a smaller scale than Aguirre.
AK Steel Holding Corp. (AKS).
On Tuesday of last week, AK Steel Holding Corp Chief Executive James Wainscott purchased 25,000 shares of the company he runs for $7.96 per share. Earlier in the week Wainscott was among few investors that were bullish about AK since the earnings report in late July. AK fell sharply after the company came in 17 cents short of analyst expectations but since the open market buying, that has changed. AK had gained 14 percent as of Friday close and its likely that number will continue to rise. Wainscott has a history of well-timed buys within in his company. He purchased shares flatly at their 2009 low only to see it ascend quickly and turn a major profit.