According to the Insider Cluster Buys screen, a Premium feature of GuruFocus, five stocks that had a high number of company insiders buying shares over the past month were CNB Financial Corp. (CCNE, Financial), Enviva Inc. (EVA, Financial), Merchants Bancorp (MBIN, Financial), Cabaletta Bio Inc. (CABA, Financial) and Dave & Buster’s Entertainment Inc. (PLAY, Financial).
Legendary Fidelity Magellan Fund manager Peter Lynch once opined that while insiders may sell shares for several reasons, they typically buy shares only when they think their company’s stock is set to appreciate in value. As such, one method investors can use to look for value opportunities is to screen for companies that have a high GF Score and high insider buys in recent months.
The insider trades are primarily sourced from Securities & Exchange Commission Form 4 filings. Any insider who makes a change to his or her ownership stake in the company through an open market purchase or sale or through other means like exercising of options or converting of derivative securities must file a Form 4. The deadline for filing is two days after the change in ownership stake takes place.
CNB Financial
Ten insiders purchased shares of CNB Financial (CCNE, Financial) during the past month. The total number of shares purchased across 10 transactions was 13,384.
Shares of CNB Financial traded around $24.05, showing the stock is modestly undervalued based on its price-to-GF Value ratio of 0.82 as of Thursday.
The Clearfield, Pennsylvania-based company provides integrated financial solutions for both consumers and businesses. The company has a GF Score of 86 out of 100 based on a rank of 9 out of 10 for growth and momentum, a profitability rank of 7 out of 10, a GF Value rank of 6 out of 10 and a financial strength rank of 4 out of 10.
CNB Financial’s profitability ranks 7 out of 10 on several positive investing signs, which include a 4.5-star business predictability rank, 10 years of positive income over the past decade and a return on equity that outperforms approximately 71% of global competitors.
Gurus with holdings in CNB Financial include Chuck Royce (Trades, Portfolio)’s Royce Investment Partners, Jim Simons (Trades, Portfolio)’ Renaissance Technologies and Jeremy Grantham (Trades, Portfolio)’s GMO.
Enviva
Eight insiders purchased shares of Enviva (EVA, Financial) during the past month. The total number of shares purchased across 11 transactions was 326,473.
Shares of Enviva traded around $51.17, showing that the stock is significantly overvalued based on its price-to-GF Value ratio of 1.56 as of Thursday.
The Bethesda, Maryland-based sustainable wood energy company has a GF Score of 63 out of 100 based on a rank of 6 out of 10 for growth and momentum, a profitability rank of 5 out of 10, a financial strength rank of 3 out of 10 and a GF Value rank of 1 out of 10.
Enviva’s financial strength ranks 3 out of 10 on several warning signs, which include a low Altman Z-score of 1.49 and a debt-to-equity ratio that underperforms more than 94% of global competitors.
Merchants Bancorp
Six insiders purchased shares of Merchants Bancorp (MBIN, Financial) during the past month. The total number of shares purchased across six transactions was 64,000.
Shares of Merchants Bancorp traded around $23.42, showing the stock is modestly undervalued based on its price-to-GF Value ratio of 0.78 as of Thursday.
The Carmel, Indiana-based bank holding company has a GF Score of 75 out of 100, driven by a momentum rank of 10 out of 10, a rank of 7 out of 10 for growth and GF Value, a profitability rank of 5 out of 10 and a financial strength rank of 2 out of 10.
Merchants Bancorp has a growth rank of 7 out of 10, driven by three-year revenue and earnings growth rates outperforming more than 90% of global competitors.
Despite high profitability and growth, the company has a financial strength rank of 2 out of 10 on several warning signs, which include a cash-to-debt ratio that underperforms more than 90% of global competitors and a debt-to-equity ratio that underperforms approximately 68% of global banks.
Cabaletta Bio
Five insiders purchased shares of Cabaletta Bio (CABA, Financial) during the past month. The total number of shares purchased was 346,000.
The Philadelphia-based clinical-stage biotech company develops T-cell therapies for a wide range of B-cell-mediated autoimmune diseases. As of Thursday, the company has a market cap of $65.18 million and trades around $1.96.
Cabaletta Bio has a financial strength rank of 9 out of 10 on several positive investing signs, which include no long-term debt and an equity-to-asset ratio that outperforms approximately 91% of global competitors.
Despite high financial strength, Cabaletta Bio has a GF Score of 34 out of 100 based on a profitability rank of 1 out of 10 and a momentum rank of 2 out of 10. Moreover, the stock does not have enough data to compute a growth rank and a GF Value rank and thus, the GF Score may give an incomplete picture of the company's potential.
Dave & Buster’s
Five insiders purchased shares of Dave & Buster’s (PLAY, Financial) during the past month. The total number of shares purchased across five transactions was 631,977.
Shares of Dave & Buster’s traded around $35.55, showing the stock is modestly undervalued based on its price-to-GF Value ratio of 0.80 as of Thursday.
The Dallas-based dining and entertainment company has a GF Score of 70 out of 100 based on a rank of 9 out of 10 for momentum and GF Value, a profitability rank of 6 out of 10, a growth rank of 2 out of 10 and a financial strength rank of 3 out of 10.
Dave & Buster’s financial strength ranks 3 out of 10 on several warning signs, which include a low Altman Z-score of 1.04 and debt-to-equity ratios that underperform more than 96% of global competitors.
