Three Cheap Stocks The Insiders Are Buying
Insider Buying Picks Up For These Stocks
While insider buying is no guarantee for higher share prices it is certainly an indication of optimism and value in a stock. This is why we like to scope out the insider-buying data, it’s a valuable source for trading ideas. What we found today is an increase in insider buying in three stocks with positive tailwinds that could produce high double-digit to low triple-digit gains for investors.
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Q2 2022 hedge fund letters, conferences and more
Bridgewater’s Pure Alpha Surges 32% On European Short Bets
According to Bloomberg, Bridgewater’s flagship Pure Alpha Fund II returned 4.8% in June, taking its return for the year to 32%. This is a staggering return to form for the fund that lost 12.6% in 2020 before going on to add 8% in 2021. Following its recent performance, the flagship hedge fund has returned 11.4% Read More
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Occidental Petroleum A Berkshire Hathaway Target
Berkshire Hathaway has been buying up shares of Occidental Petroleum (NYSE:OXY) all year and there is no sign of it stopping. The last reported purchase was July 1st for nearly $286 million which brought the total holdings to more than 17.4% of the company and growing, which is quite a vote of confidence. Occidental isn’t the highest-yielding stock in the energy sector but it is among the better values. A simple price multiple expansion to in-line with leaders like Exxon and Chevron could add another $20 to $30 to share prices on its own and the company is expected to post solid earnings results this quarter.
The analyst’s sentiment in Occidental Petroleum is high as well. The stock is among the most upgraded over the past quarter and pegged at a Moderate Buy. The latest commentary included a price target reduction but this is an outlier ahead of the earnings season. The consensus sentiment and price target are both trending higher and are supported by high oil prices.
Carvana Insiders Are Buying At Rock Bottom Prices
The annualized insider buying data for Carvana (NYSE:CVNA) is mixed but the recent trend is anything but. Insiders and major shareholders have been buying heavily over the past few months and scooping up shares at rock bottom prices. The company’s sales have been impacted by rising inflation and the post-COVID slowdown and that caused a major correction in the market but that correction is close to playing out. While business growth has peaked the underlying fundamentals of the used car market are bullish and that suggests longer-term success for the company. The analysts have reeled in their targets because of it but still view the stock as a Hold/Weak Buy with 50% to 100% of upside in share prices.
The chart of Carvana is ugly with share prices down 93% from their high and the short-sellers are partly to blame. The short-sellers have the short interest up to 30% right now which is quite a weight for the market to bear. Eventually, and that may be as soon as the current reporting period, the stock will begin to bottom and a short-covering rally will begin. Carvana is slated to report in early August and post a growing top line and narrowing loss.
Warner Bros. Discovery Dirt Cheap After Spin-Off
Warner Bros. Discovery (NASDAQ:WBD) share prices went on a wild ride leading up to and following the spin-off from AT&T. The stock is now trading at dirt-cheap levels and insiders are buying. The stock is among the most purchased by insiders over the past 90 days but that may not be enough to keep the stock from falling further. The analysts have been slashing their price targets for the stock and there is some fear media companies could be hard hit by a recession. Even so, the new low targets are still about 50% above the current price action and the stock is rated a Buy.
Article by Thomas Hughes, MarketBeat
Updated on Jul 7, 2022, 5:14 pm