Long-term value investors understand that truly profitable trends can take time to build up. Stock market sectors wax and wane with the economy and flow along the curvature of the business cycle, but others don't necessarily obey the same rules.
There's an old saying by Mark Twain, “buy land – it's the one thing they’re not making any more of.” Value investors can take it one step further, though. Arable land is limited, and the global population is growing. That makes food production a critical industry that will continue to be relevant regardless of economic direction.
Low oil prices translate into higher consumer spending which benefits food production companies as well. As a defensive non-cyclical industry, demand stays relatively constant regardless of how the economy is performing.
When directors of a company start buying shares, it's a sign to investors that they think the stock is about to go up. That's because they usually have knowledge in excess of Wall Street professionals that isn't ubiquitously known. For investors, it's a sign that the stock could be ready for a break out.
Insider selling could be due to any number of reasons, but insider buying can only be attributed to a positive outlook by management. In the last three months, this stock has seen 35 open market buys for a total of 468,358 shares and in the last six months, there have been 113 buys for 528,361 shares.
A stock that's down, but not out
Terex Corporation (TEX) is a $3 billion farm and construction machinery manufacturer with operations around the globe. The company posted a first quarter loss of $0.02 per share on April 29th – far short of the expected gain of $0.18 per share by analysts covering the stock. Revenues fell 9.6% year-over-year as well. The miss added to the stocks disappointing performance with a total drop of 30% in the past year. However, there are reasons investors should take a second look. Continue reading "Recent Insider Buying Could Be A Clue This Stock Is About To Take Off"→
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