Today, I'm going to do something different...
As the chief-investment strategist behind
, I normally spend hours poring over a multitude of newspapers and
financial journals to bring my readers the
's next groundbreaking trend.
While this approach has been highly successful, every now and then
I like to try something new.
So rather than spending the laborious hours digging through mounds
of financial data trying to decipher what will be the "next big
thing," I'm going to be looking at where some of the industry's
most respected figures -- the insiders -- are parking their cash.
After all, if the
of Company X starts buying his stock when it's trading in the
proverbial "toilet," then that tells us something about
management's long-term expectations for the business...
So, using the Bloomberg Professional Service, I performed a special
search function to display all insider trades for the past six
months with a
of more than $1 million. Because stock is often part of an
executive's total compensation package, I excluded filings that
were made to exercise stock options.
After looking at all the insider buys from the past six months, two
companies in particular stood out as potential game-changers...
The first company to make my list was
. Amyris is ultimately a bio-fuel company, but that's not the whole
story -- not by a long shot.
The better frame for Amyris is as a "synthetic biology" company.
Its scientists use special organisms that are basically little
living factories that have been genetically programmed to produce a
Right now, the company has its sights set on biofuel, specifically
on generating cellulosic ethanol from Brazilian sugarcane. Amyris
is a pioneer in this field.
One of Amyris' insiders recently made a $24.5 million bet on this
technology, buying nearly 4.6 million
of the $300 million company for $5.78 each...
Of course, timing is everything. And the timing of this trade is
worth looking into. The stock-price chart for this company is
brutal: It's down more than 55% for the year as the broader market
has surged 11.5%. As the stock fell, however, this insider stuck
his neck out.
Turns out it wasn't just any insider either... Once revealed, the
buyer proved to be none other than
Total SA (NYSE:
, the French oil giant.
If an industry leader and qualified expert such as Total, which
knows as much about the future of energy as anyone on earth, is
willing to buy into a "falling" stock like Amyris, then it's
logical to assume that there is a good reason.
The clear and unmistakable conclusion here is that Total thinks
, and its technology, has legs.
Another company sitting on a promising business venture is
Geoeye (Nasday: GEOY)
. Geoeye is a satellite company that sells images to intelligence
agencies, among other customers.
International tensions in a variety of "closed" hotspots like North
Korea and Iran make this type of signal intelligence invaluable,
and such images are the lifeblood of operations in forward areas
like Afghanistan. Without good satellite coverage, Osama bin Laden
would still be living in his Abbottabad compound.
Insiders bought $41.1 million of this company last November at an
average purchase price of $21.98 a share, fairly close to where the
stock trades right now. The nice thing here is that this is a true
"conviction buy" by individuals. None of these trades were made by
or another major shareholder -- only executives and directors.
Their message is clear: As the company's stock falls under its
, we're going to buy it. I expect to see more of this -- Shares are
trading at 11 times
and 11 times anticipated earnings, but for the past two years
they've been valued far more richly, at 16.7 times earnings, or
more than 50% higher than they are now.
It's a value play then, to some degree. But is it a game-changer?
Satellite technology, and GeoEye itself, changed the nature of
intelligence gathering. The company has leveraged its ability to
gather extra-terrestrial images for other commercial purposes, and
production and other services for its clients now accounts for 20%
of its revenue, an area that is likely to grow. This remains an
aggressive growth play.
Risks to Consider:
Let me warn you though... with investing, nothing is 100%
certain. Both of these companies have relatively small-market caps.
As such, you can expect quite a bit of volatility from both of
Action to Take -->
That said, I think these stocks are worth taking a look at. Both
companies are sitting on cutting-edge technology with the potential
to deliver serious-short-term and long-term results... and company
insiders clearly think that's worth something.
P.S. -- My research team and I have spent the past couple of
months finding the biggest investment trends for the coming year.
We've made 11 predictions, each of which offers investors a good
chance to profit over the twelve months. If you want to learn more
about these "game-changing" predictions, I invite you to watch this
Andy Obermueller does not personally hold positions in any
securities mentioned in this article. StreetAuthority LLC does not
hold positions in any securities mentioned in this article.
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