Month: May 2012

As the saying goes, there are many possible reasons for an insider to sell a stock, but only one reason to buy — they expect to make money. So let’s look at two noteworthy recent insider buys.

Southwest Airlines (NYSE:LUV) known for its cheap domestic flights, is now going international. The airline plans to start making international flights for the first time with its move to start offering former AirTran’s routes to Mexico and the Caribbean. The company is looking to add as many as 25 flights a day.This would require the opening of a new terminal at Houston’s William P. Hobby Airport which will cost between $100- $125 million. Starting international flights for the first time was most likely a reason why Southwest decided to buy AirTran last year for $1 billion. The opening of the new terminal will bring roughly 1.5 million more passengers annually to the Houston airport as well as create 10,000 jobs and bring in about $1.6 billion a year.Southwest stock climbing on the news. Shares are currently 2.5% higher at $8.57.

Bargain hunters are wise to pay careful attention to insider buying, because although there are many various reasons for an insider to sell a stock, presumably the only reason they would use their hard-earned dollars to make a purchase, is that they expect to make money. Today we look at two noteworthy recent insider buys.

In trading on Friday, home furnishings & improvement shares were relative leaders, up on the day by about 2.1%. Leading the group were shares of Sealy (ZZ), up about 8.7% and shares of Tempur Pedic International (TPX) up about 6% on the day.

Discount retailer Costco (NASDAQ:COST) seeing positive improvement for the third quarter. The company reported fiscal Q3 EPS of $0.88, topping estimates by a penny. That’s an increase of 19% from the same period last year.Revenues in the quarter rose 8.2% year-over-year to $22.3 billion, beating estimates of $22.21 billion. The company reported Q3 core comp sales rose 5%, vs. estimates of a 5.7% rise. Prior to today’s results, Costco met or beat EPS estimates 6 out of the last 8 quarters, and met or beat revenue estimates in 7 of last 8 quarters.

Flowers Foods (NYSE:FLO) reported Q1 EPS of $0.28, inline with estimates.Revenues in the quarter rose 12% year-over-year to $898 million, beating estimates by $9 million.The company said its input costs hurt margins, offset that with SG&A and operations expense cuts, it reported Q1 gross margins of 46.7% vs. 48.6% year-over-year and it sees 2012 EPS rising 3.5% – 8% from $0.96 in 2011, vs. its prior view of 7% – 12% growth given on February 9th, which implies $0.99 – $1.04. More or less their high range of guidance is inline with analyst estimates.Flowers Foods currently up on the stock exchange, seeing an increase of over 5.5% to $20.68.

Cascade (NYSE:CAE) reported fiscal Q4 EPS of $0.21, beating estimates by $0.02. Revenues in the quarter rose 8.8% year-over-year to $506.7 million, missing estimates by $6 million. SmarTrend currently has Cascade in an Uptrend. Since 2008, SmarTrend subscribers trading Cascade using our alerts outperformed the stock by 54%. We are monitoring these developments and will alert subscribers to any change in trend.

Arch Coal (ACI) was upgraded today by Goldman Sachs (GS) from sell, as the stock has sold off during the last few months, and is now below the $8 price target set by the firm. Shares are lower by abouot 1.75 percent.

In trading on Thursday, hospital & medical practitioners shares were relative leaders, up on the day by about 1.4%. Leading the group were shares of Community Health Systems (CYH), up about 3.7% and shares of Amerigroup (AGP) up about 3.5% on the day.

Tiffany (TIF) announced first-quarter results that were below Wall Street expectations. The company reported a profit of $81.5 million, or 64 cents a share, last quarter, versus a profit of $81.1 million, or 63 cents a share, in the same period last year.