– By James Li
According to Insider Cluster Purchases, a premium feature of GuruFocus, the five stocks that have seen a high number of unique insider buys in recent months are Mid Penn Bancorp Inc. (NASDAQ: MPB), First Choice Bancorp (NASDAQ: FCBP), Compass Diversified Holdings (NYSE: CODI), Malvern Bancorp Inc. (NASDAQ: MLVF) and Howard Bancorp Inc. (NASDAQ: HBMD).
Peter Lynch, legendary fund manager of Fidelity Magellan, said that while insiders of the company can sell their shares for several reasons, insiders buy shares for one reason only: They believe that the shares of the company may rise in value. .
GuruFocus Monthly insider buy-sell ratio chart Tracks the ratio of the number of insider buys to the number of insider sales for each month. Our research suggests that the trend of insider buy-to-sell ratios may identify entry points into the market.
Our research further suggests that stocks in which multiple directors and executives have purchased shares have good growth potential. As such, investors can look for opportunities in stocks where several company insiders have bought stocks in the past few months.
The Insider Cluster Purchases The page tracks both the number of insider buys and the number of unique insider buys. The main difference between these two columns is that the last one shows the number of different insiders buying stocks, while the first one shows the total number of buy transactions of all insiders in the last few months.
Mid Penn Bancorp
Eight initiates bought shares of Mid Penn Bancorp (NASDAQ: MPB) in the past three months. The total number of shares purchased in eight transactions is 1,714.
The Millersburg, PA-based company provides commercial banking and various other financial services. According to GuruFocus, the company has a Piotroski F-score of 5 and debt ratios that surpass more than half of its global competitors.
First Choice Bancorp
Eight insiders bought shares of First Choice Bancorp (NASDAQ: FCBP) in the past three months. The total number of shares purchased in eight transactions is 18,483.
The California Bank offers commercial, industrial and residential mortgages to individuals and small businesses. According to GuruFocus, the company has a low Piotroski F-score of 3 and underperforming debt ratios of over 75% of its global competitors, suggesting poor financial strength.
Jim Simons (trades, portfolio) ‘Renaissance Technologies owns an interest in First Choice Bancorp.
Compass Diversified Holdings
Seven insiders bought shares of Compass Diversified Holdings (NYSE: CODI) in the past three months. The total number of shares purchased in seven transactions is 36,570.
The Westport, Connecticut-based conglomerate operates two groups of companies: branded consumer companies and niche industrial companies. GuruFocus ranks the company’s financial strength 5th out of 10: Although the company has a safe F Piotroski score of 6 and an M Beneish score which suggests minimal profit manipulation, Compass Diversified Holdings has a low Altman Z score of 1.78 and an interest coverage ratio below more than 69% of global competitors.
Royce Investment Partners of Chuck Royce (Trades, Portfolio) owns an interest in Compass Diversified Holdings.
Seven insiders bought shares of Malvern Bancorp (NASDAQ: MLVF) in the past month. The total number of shares purchased in seven transactions is 2,800.
The Pennsylvania-based bank provides checking and savings accounts, and in turn issues loans for commercial and residential real estate projects. According to GuruFocus, Malvern’s equity-to-assets ratio of 0.12 surpasses more than 73% of global banks despite lower debt ratios than more than 65% of its global competitors.
Seven insiders bought shares of Howard Bancorp (NASDAQ: HBMD) in the past month. The total number of shares purchased in 11 transactions is 4,338.
The Baltimore-based bank provides community banking, mortgage banking and financial services to consumers. According to GuruFocus, Howard Bancorp has a low Piotroski F-score of 3 and debt ratios below more than half of its global competitors.
Disclosure: No position.
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This article first appeared on GuruFocus.