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2 Stocks Flashing Signs of Strong Insider Buying

2 Stocks Flashing Signs of Strong Insider Buying

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4 years ago

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After a run of gains since June 12, markets are taking a turn down today. The slip, over 2.5% on both the S&P 500 and the Dow Jones, comes after Florida confirmed more than 5,500 new coronavirus cases. The sudden spike raised new fears that the still-fragile economic reopening may be derailed. The mood wasn’t helped by orders from the states of New York, New Jersey, and Connecticut – which had all been hard-hit by the virus – that all visitors from known hot spots must self-quarantine for 14 days.

In times like this, it’s a comfort for investors to follow a reliable trading signal. Corporate officers, who are privy to the inside information on their companies, have an obligation to serve the best interests of their shareholders, and are held responsible for their actions, don’t jump lightly when it comes to trading. That duty and accountability, and the legal requirement to disclose all trades in the companies they serve, makes following corporate officers – the insiders, if you will – a common strategy for investors.

TipRanks has the data and the tools to unwind the insiders’ actions. The Insiders’ Hot Stocks tool highlights the equities that corporate insiders are moving on. We’ve picked two stocks that show signs of informative buys, purchases that are more extensive than ordinary. Let’s look at the details.

Magnolia Oil & Gas (MGY)

We will start with Magnolia, a small-cap oil and gas exploration and production company based in Texas’ Eagle Ford formation. Eagle Ford is part of the Permian Basin, the rich petroleum region which has propelled Texas to the forefront of the North American hydrocarbon industry.

Magnolia’s production beat estimates in Q1, reaching 68.4 thousand barrels of oil equivalent per day. If that total, 55% was crude oil. Weakness in oil prices hurt Magnolia during the quarter, and forced a net loss of 11 cents per share. MGY stock performance was followed the earnings, and the company’s shares are still down 35% since February.

Company CEO Steve Chazen cast a vote of confidence this week when he spend almost $300,000 buying up a bloc of 50,000 shares in MGY. Chazen has been making periodic purchases of Magnolia shares for the last two years.

Covering this stock for MKM Partners, analyst John Gerdes is also optimistic about Magnolia. He looks at forward production estimates, and sees the company generating plenty of cash: “Assuming ~$260 million in capital expenditures this year, Magnolia should generate ~$50 million of FCF in 2020 assuming NYMEX ~$33 oil/~$2.10 gas. Assuming approximately $250 million in capital spending next year and NYMEX $45 oil/$2.65 gas, the company should generate ~$130 million of FCF in 2021…”

Gerdes uses his FCF assumptions to justify a Buy rating and a $7 price target, which implies a 25% one-year upside. (To watch Gerdes’ track record, click here)

Magnolia shares are priced at just $5.59, and the average price target of $6.38 suggests it has room for 14% upside growth in the next 12 months. MGY's Moderate Buy consensus rating includes 6 Buys and 3 Holds set in the last month. (See Magnolia stock analysis on TipRanks)

Groupon, Inc. (GRPN)

At first glance, e-commerce innovator Groupon should have weathered the coronavirus storm better than it did. Shares are still far down from February’s trading levels, and first quarter earnings turned sharply negative after holding at or near break-even through 2018 and most of 2019. Q4 2019 saw strong profitability; that ended abruptly in Q1 2020.

On a positive note, the EPS loss was far narrower than had been feared. The company finished Q1 with a strong cash position, too, having some $667 million on hand. That total includes $150 million borrowed from a revolving credit facility.

But the big news for GRPN stock comes from company chair and co-founder Eric Lefkofsky. He bought up 250,000 shares, spending $5.39 million to add that to his already extensive holdings. Lefkofsky’s move signaled that GRPN is worth buying – especially because his declared purchase price was over $21 per share. GRPN was trading for less than that when Lefkofsky made his buy, and it is still trading for less today. This gives investors a rare chance to snap up common stock for less than the price paid by the best-informed insiders.

Wedbush’s 5-star analyst Ygal Arounian sums up the cautious Wall Street consensus on this stock. He sees some strong opportunities for the company in the near future, writing, “One area of potential upside for Groupon is in Goods, where the company noted that it is seeing traction in recalibrating its assortment towards areas like first aid, face masks, and more recently, outdoor furniture/gardening… the overall buoyancy in ecommerce should provide tailwinds…”

However, he also notes that the company’s large outdoor events segment has been derailed by COVID-19, and efforts to adapt are facing the distinct possibility of a coronavirus resurgence. Arounian remains neutral here, placing a Hold on the stock with a $22 price target. His target suggests a 11% upside potential. (To watch Arounian’s track record, click here)

The conventional wisdom on GRPN shares is to Hold. This analyst consensus rating is based on 4 Holds and 1 Sell sent in recent weeks, along with 2 Buys. The stock is selling for $19.89, but the average price target is bullish. At $25.71, it suggests a strong 29% upside potential in the year to come. (See Groupon stock-price forecast on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

The post 2 Stocks Flashing Signs of Strong Insider Buying appeared first on TipRanks Financial Blog.

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate…

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2 hours ago

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March 9, 2024

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate iron levels in their blood due to a COVID-19 infection could be at greater risk of long COVID.

(Shutterstock)

A new study indicates that problems with iron levels in the bloodstream likely trigger chronic inflammation and other conditions associated with the post-COVID phenomenon. The findings, published on March 1 in Nature Immunology, could offer new ways to treat or prevent the condition.

Long COVID Patients Have Low Iron Levels

Researchers at the University of Cambridge pinpointed low iron as a potential link to long-COVID symptoms thanks to a study they initiated shortly after the start of the pandemic. They recruited people who tested positive for the virus to provide blood samples for analysis over a year, which allowed the researchers to look for post-infection changes in the blood. The researchers looked at 214 samples and found that 45 percent of patients reported symptoms of long COVID that lasted between three and 10 months.

In analyzing the blood samples, the research team noticed that people experiencing long COVID had low iron levels, contributing to anemia and low red blood cell production, just two weeks after they were diagnosed with COVID-19. This was true for patients regardless of age, sex, or the initial severity of their infection.

According to one of the study co-authors, the removal of iron from the bloodstream is a natural process and defense mechanism of the body.

But it can jeopardize a person’s recovery.

“When the body has an infection, it responds by removing iron from the bloodstream. This protects us from potentially lethal bacteria that capture the iron in the bloodstream and grow rapidly. It’s an evolutionary response that redistributes iron in the body, and the blood plasma becomes an iron desert,” University of Oxford professor Hal Drakesmith said in a press release. “However, if this goes on for a long time, there is less iron for red blood cells, so oxygen is transported less efficiently affecting metabolism and energy production, and for white blood cells, which need iron to work properly. The protective mechanism ends up becoming a problem.”

The research team believes that consistently low iron levels could explain why individuals with long COVID continue to experience fatigue and difficulty exercising. As such, the researchers suggested iron supplementation to help regulate and prevent the often debilitating symptoms associated with long COVID.

“It isn’t necessarily the case that individuals don’t have enough iron in their body, it’s just that it’s trapped in the wrong place,” Aimee Hanson, a postdoctoral researcher at the University of Cambridge who worked on the study, said in the press release. “What we need is a way to remobilize the iron and pull it back into the bloodstream, where it becomes more useful to the red blood cells.”

The research team pointed out that iron supplementation isn’t always straightforward. Achieving the right level of iron varies from person to person. Too much iron can cause stomach issues, ranging from constipation, nausea, and abdominal pain to gastritis and gastric lesions.

1 in 5 Still Affected by Long COVID

COVID-19 has affected nearly 40 percent of Americans, with one in five of those still suffering from symptoms of long COVID, according to the U.S. Centers for Disease Control and Prevention (CDC). Long COVID is marked by health issues that continue at least four weeks after an individual was initially diagnosed with COVID-19. Symptoms can last for days, weeks, months, or years and may include fatigue, cough or chest pain, headache, brain fog, depression or anxiety, digestive issues, and joint or muscle pain.

Tyler Durden Sat, 03/09/2024 - 12:50

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February Employment Situation

By Paul Gomme and Peter Rupert The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000…

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3 hours ago

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March 9, 2024

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By Paul Gomme and Peter Rupert

The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000 average over the previous 12 months. The payroll data for January and December were revised down by a total of 167,000. The private sector added 223,000 new jobs, the largest gain since May of last year.

Temporary help services employment continues a steep decline after a sharp post-pandemic rise.

Average hours of work increased from 34.2 to 34.3. The increase, along with the 223,000 private employment increase led to a hefty increase in total hours of 5.6% at an annualized rate, also the largest increase since May of last year.

The establishment report, once again, beat “expectations;” the WSJ survey of economists was 198,000. Other than the downward revisions, mentioned above, another bit of negative news was a smallish increase in wage growth, from $34.52 to $34.57.

The household survey shows that the labor force increased 150,000, a drop in employment of 184,000 and an increase in the number of unemployed persons of 334,000. The labor force participation rate held steady at 62.5, the employment to population ratio decreased from 60.2 to 60.1 and the unemployment rate increased from 3.66 to 3.86. Remember that the unemployment rate is the number of unemployed relative to the labor force (the number employed plus the number unemployed). Consequently, the unemployment rate can go up if the number of unemployed rises holding fixed the labor force, or if the labor force shrinks holding the number unemployed unchanged. An increase in the unemployment rate is not necessarily a bad thing: it may reflect a strong labor market drawing “marginally attached” individuals from outside the labor force. Indeed, there was a 96,000 decline in those workers.

Earlier in the week, the BLS announced JOLTS (Job Openings and Labor Turnover Survey) data for January. There isn’t much to report here as the job openings changed little at 8.9 million, the number of hires and total separations were little changed at 5.7 million and 5.3 million, respectively.

As has been the case for the last couple of years, the number of job openings remains higher than the number of unemployed persons.

Also earlier in the week the BLS announced that productivity increased 3.2% in the 4th quarter with output rising 3.5% and hours of work rising 0.3%.

The bottom line is that the labor market continues its surprisingly (to some) strong performance, once again proving stronger than many had expected. This strength makes it difficult to justify any interest rate cuts soon, particularly given the recent inflation spike.

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Spread & Containment

Another beloved brewery files Chapter 11 bankruptcy

The beer industry has been devastated by covid, changing tastes, and maybe fallout from the Bud Light scandal.

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3 hours ago

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March 9, 2024

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Before the covid pandemic, craft beer was having a moment. Most cities had multiple breweries and taprooms with some having so many that people put together the brewery version of a pub crawl.

It was a period where beer snobbery ruled the day and it was not uncommon to hear bar patrons discuss the makeup of the beer the beer they were drinking. This boom period always seemed destined for failure, or at least a retraction as many markets seemed to have more craft breweries than they could support.

Related: Fast-food chain closes more stores after Chapter 11 bankruptcy

The pandemic, however, hastened that downfall. Many of these local and regional craft breweries counted on in-person sales to drive their business. 

And while many had local and regional distribution, selling through a third party comes with much lower margins. Direct sales drove their business and the pandemic forced many breweries to shut down their taprooms during the period where social distancing rules were in effect.

During those months the breweries still had rent and employees to pay while little money was coming in. That led to a number of popular beermakers including San Francisco's nationally-known Anchor Brewing as well as many regional favorites including Chicago’s Metropolitan Brewing, New Jersey’s Flying Fish, Denver’s Joyride Brewing, Tampa’s Zydeco Brew Werks, and Cleveland’s Terrestrial Brewing filing bankruptcy.

Some of these brands hope to survive, but others, including Anchor Brewing, fell into Chapter 7 liquidation. Now, another domino has fallen as a popular regional brewery has filed for Chapter 11 bankruptcy protection.

Overall beer sales have fallen.

Image source: Shutterstock

Covid is not the only reason for brewery bankruptcies

While covid deserves some of the blame for brewery failures, it's not the only reason why so many have filed for bankruptcy protection. Overall beer sales have fallen driven by younger people embracing non-alcoholic cocktails, and the rise in popularity of non-beer alcoholic offerings,

Beer sales have fallen to their lowest levels since 1999 and some industry analysts

"Sales declined by more than 5% in the first nine months of the year, dragged down not only by the backlash and boycotts against Anheuser-Busch-owned Bud Light but the changing habits of younger drinkers," according to data from Beer Marketer’s Insights published by the New York Post.

Bud Light parent Anheuser Busch InBev (BUD) faced massive boycotts after it partnered with transgender social media influencer Dylan Mulvaney. It was a very small partnership but it led to a right-wing backlash spurred on by Kid Rock, who posted a video on social media where he chastised the company before shooting up cases of Bud Light with an automatic weapon.

Another brewery files Chapter 11 bankruptcy

Gizmo Brew Works, which does business under the name Roth Brewing Company LLC, filed for Chapter 11 bankruptcy protection on March 8. In its filing, the company checked the box that indicates that its debts are less than $7.5 million and it chooses to proceed under Subchapter V of Chapter 11. 

"Both small business and subchapter V cases are treated differently than a traditional chapter 11 case primarily due to accelerated deadlines and the speed with which the plan is confirmed," USCourts.gov explained. 

Roth Brewing/Gizmo Brew Works shared that it has 50-99 creditors and assets $100,000 and $500,000. The filing noted that the company does expect to have funds available for unsecured creditors. 

The popular brewery operates three taprooms and sells its beer to go at those locations.

"Join us at Gizmo Brew Works Craft Brewery and Taprooms located in Raleigh, Durham, and Chapel Hill, North Carolina. Find us for entertainment, live music, food trucks, beer specials, and most importantly, great-tasting craft beer by Gizmo Brew Works," the company shared on its website.

The company estimates that it has between $1 and $10 million in liabilities (a broad range as the bankruptcy form does not provide a space to be more specific).

Gizmo Brew Works/Roth Brewing did not share a reorganization or funding plan in its bankruptcy filing. An email request for comment sent through the company's contact page was not immediately returned.

 

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