Cluster Insider Buying at Terex
Terex (TEX) has seen 11 insiders make purchases providing a very strong insider buying signal called a "cluster-buy". The insiders purchases 32,502 shares at an average price of $14.71/share, for a total of $478K.
Not a massive amount of money, but definitely a strong signal with the purchases being so wide spread. Of course, it could just be a internal scam to trick outside investors.
The interesting opportunity presented investors today is the ability to buy shares at prices lower the insiders. As much as people think the game is rigged, other people realize that it does present opportunities to buy at the same price as people with inside knowledge.
TEX has been saying for a long time that its business has been picking up, but the market has ignored them for the post part. It wouldn't be the first time that insiders were blind to changes in the global economy.
TEX is a solid holding in our Opportunistic models as below so we're definitely hoping this insiders know what they are doing.
Data per Yahoo Market Pulse:
Stone Fox Capital holds an allocation of 3.4% in $TEX in his
Opportunistic Arbitrage Long Only Covestor Model
Stone Fox Capital holds an allocation of 9.7% in $TEX in his
Opportunistic Arbitrage Covestor Model
Disclosure: Long TEX. Please review the disclaimer page for more details.
Comments
First, recent buying would be to me, within the last 20 or so trading days, or roughly the last month.
Second, you are noticing a trend of the insiders cyclical buying through the employee stock purchase program. Case in point look at CEO Ron DeFeo’s purchases over the last 3 monthly transaction periods. All within 1% of each other.
Look at the same transaction dates for Brian J Henry, within 1% for all 3 buying periods.
Look at the same transaction dates for Phillip Widman, within 1%.
Look at the same transaction dates for Kevin Barr, within 1%.
Look at the same transaction dates for Kenneth D. Lousberg, within 1% for all 3 buying periods with 1 additional purchase.
See a trend? Only a small number of these guys is buying additional stock, roughly 4 of the 11 that you purported to have purchased based on your analysis of the insiders.
The only ones that break the trend are David A Sachs, Kieran Hegarty, George Ellis, and Ken Lousberg.
You might want to check in on these figures before you buy into Terex Stock. While it is undervalued, notice none of the insiders bought at the 52 week low, most of them bought as it was recovering from its 52 week low about a week later, and while they did see the upside of the 3rd quarter numbers that were released on October 26, some have bought above the 50 day moving average. Watch for Terex to be a hot stock in 2012 based strictly on the numbers and because the market has down played Terex in 2011. I am long TEX and buying in at all lows.
The insiders clearly aren't the best timers, but they have established a trend of buying in these relative levels. The key to me is that you can buy below the insiders. It doesn't happen often that investors are being tipped off by insiders and the price is cheaper.
By religiously looking at the analyst reports, and the wild swings in the stock value it is clear that the market does not understand how versatile Terex really is as a corporation. Exposed to not just the US, but also to Europe and the emerging markets in Asia, Terex is poised for growth with all its business segments. In Q3 2011, being able to beat analyst projections was only just the beginning, look for TEX to put down large gains in its peak cyclical activity at the end of Q1 and early Q2 regardless of the market conditions throughout Europe, the far east, and globally.
Have you been watching the changes in Terex lately? Were you able to take in some of the most recent gains?
I am very enthused at the results I have been seeing while buying the stock on the low, with my latest purchase of the stock occurring at 13.10, I am already up nearly 25% in less than a week.
Not sure what to attribute todays strength other than either a technical bounce off the 50ems or the reverse H&S pattern.
None of this even accounts for the fact that Demag AG has been showing growth, and with Terex holding 82% we will see a cash buyout of the remaining shares by Q2 2012.
What are your thoughts on this stock recently?
I am long TEX.
Do you follow URI? That stock has rocketed from 14 to 34. Wow, should've bought the rental company instead of the equip maker.