August turned out to be a disappointing month for equities as all three benchmark indexes fell. The losses in U.S. equity market were mainly due to concerns over Federal Reserve’s bond purchase program. There is growing speculation that the Fed might start easing its $85 billion a month bond purchases soon.
With markets expected to remain volatile over the next few months, investors will have to be cautious in picking stocks. Apart from the usual fundamental analysis, investors should also look at other factors such as insider buying activity. In fact, monitoring insider buying activity can be very useful in picking stocks as it shows the management’s sentiment on the stock. If there is considerable insider buying in a particular stock, it indicates that the management is confident about the company’s prospects. With this in mind, let us take a look at some recent insider buying activity.
Luminex Chairman Buys Shares in August
G. Walter Loewenbaum II, Independent Chairman of Luminex Corporation’s (NASDAQ: LMNX) Board, bought significant shares of LMNX common stock during the month of August. Loewenbaum’s most recent purchase was on August 28, 2013, when he bought 6,668 shares at $20.69 per share.
On August 27, 2013, the Chairman bought 13,332 shares at $20.80 per share. On August 15, 2013, he bought 10,000 shares at $20.82 per share. On August 9, 2013, Loewenbaum bought 4,600 shares at $21.17 per share. On August 6, 2013, he bought 400 shares at $19.96 per share. On August 2, 2013, Loewenbaum bought 27,000 shares at $20.01 per share.
LMNX shares had a decent run in August, gaining nearly 2% even as the broader market struggled. Loewenbaum’s purchases don’t come as a surprise, given LMNX shares strong performance in 2013 so far. Year-to-date, the stock has gained more than 20.80%, outperforming the broader market.
Luminex, which develops, manufactures and sells biological testing technologies and products with applications throughout the life sciences and diagnostic industries, in July, reported consolidated second-quarter revenue of $54.3 million, up 12% on a year-over-year basis.
Datawatch Director Buys Shares
Christopher T. Cox, Independent Director of Datawatch Corporation (NASDAQ: DWCH), recently bought 12,565 shares of DWCH common stock in two separate transactions.
Cox bought 1,565 shares at $22.35 per share on August 27, 2013. A day before, he bought 11,000 shares at $23.11 per share. However, Cox’s is the only major insider purchase in recent months. The last time DWCH saw insider buying was in May this year when Ben Plummer, the company’s Chief Marketing Officer, bought 2,000 shares in two separate transactions. Plummer bought 1,500 shares of DWCH on May 31, 2013. This purchase was made at $14.86 per share. On May 30, 2013, Plummer bought 500 shares of DWCH at $14.89 per share.
DWCH shares had an excellent run in August. The stock gained 16.3% in the month of August even as the broader market fell. For the year, the stock has gained more than 73%.
Earlier this week, Datawatch, which is engaged in the design, development, manufacture, marketing, and support of business computer software, announced the completion of acquisition of Panopticon Software AB, a Sweden-based privately held company and an industry leader in real-time visual data discovery solutions.
In its most recently reported quarterly results (Q3), DWCH had reported revenue of $7.83 million, up 9% on a year-over-year basis.
TASER International Director Buys Shares
Hadi Partovi, Independent Director at TASER International Inc. (NASDAQ: TASR), bought 50,000 shares of TASR common stock on August 29, 2013. The purchase was made at $11.89 per share. This is the second time this year that Partovi has bought TASR shares. On February 25, 2013, Partovi bought 50,000 shares of
TASR at $7.10 per share.
TASR shares rallied in August, gaining more than 31%. Year-to-date, the stock has gained 30.20%, outperforming the S&P 500.
In July, TASR had reported its financial results for the second quarter ended June 30, 2013. The company had reported net sales of $32.2 million, up 14% on a year-over-year basis. The main driver for increase in sales was the upgrade by several law enforcement agencies to the new TASER® X26P™ Smart Weapon. Apart from upgrade, restocking orders from distributors also led to higher cartridge sales in comparison to the second quarter of 2012.
Dick’s Sporting Goods CFO Buys Shares
Dick’s Sporting Goods Inc. (NYSE: DKS), a sports and fitness specialty omni-channel retailer, also saw some insider buying activity recently. Andre J. Hawaux, the company’s CFO, bought 6,4000 shares of DKS common stock on August 21, 2013 at $47.25 per share. Apart from Hawaux’s purchase, there has only been one instance in 2013 so far where an insider has bought DKS shares. On March 19, 2013, Vincent Byrd, an Independent Director, bought 1,000 shares of DKS common stock at $47.17 per share.
Hawaux’s purchase came a day after Dick’s Sporting Goods reported its second-quarter financial results. For the quarter ended August 3, 2013, the Coraopolis, Pennsylvania-based company reported consolidated non-GAAP net income of $88.9 million, or $0.71 per share, compared to $81.3 million, or $0.65 per share reported for the same period in the previous year.
DKS’s net income on a GAAP basis was $84.2 million, or $0.67 per share, compared to $53.2 million, or $0.43 per share reported for the same period in the previous year. Net sales for the second quarter were $1.5 billion, up 6.6% on a year-over-year basis.
Edward W. Stack, Chairman and CEO of Dick’s Sporting Goods, noted that the company’s second-quarter results were below guidance as a sluggish consumer environment along with higher levels of precipitation and cooler temperature contributed to a decrease in traffic, resulting in lower-than-expected same store sales. Stack said that despite these challenges in the second quarter, the company was able to generate record non-GAAP earnings per share.
DKS shares struggled during the month of August, falling more than 9.70%, compared to a loss of 3.12% in the S&P 500. The stock has also underperformed the broader market for the year. Year-to-date, DKS shares have gained 2.02%, compared to a gain of 14.50% for the S&P 500.