It was an exciting week, wasn’t it? We have seen that the markets saw record fluctuations in both absolute points and relative percentages, both up and down, as investors switched between panicking and buying the slump. The week ended on a positive note: the S&P 500 rose 9% after President Trump declared a national emergency and the federal government took initiatives to combat the corona virus and provide economic support. Markets found additional support from the Federal Reserve, which announced a $ 37 billion bond purchase to provide liquidity to the economy. Oil prices also stabilized on Friday as Trump’s program increased purchases for the U.S. strategic oil reserve.
President Trump’s policy statement wasn’t the only good news. There is evidence from China that the epidemic could peak. Local and provincial government agencies are reporting more patients than new cases, and factories and offices are starting to work again. This is a sign that the end may be in sight, at least for the epicenter of the epidemic, and gives hope that the disease can be contained before irreversible economic damage is done.
Investors can of course make their own contribution. The markets plunged into the bear area last week, but with every drop in price there is an opportunity to buy in at a discount. Insiders – those corporate officers who are responsible for running their businesses and generating returns for shareholders – bought stocks in large quantities. They made big purchases during the market crash, and although their stock purchases didn’t boost the overall market, they could be an important signal for investors. These purchases signal trust as much as possible.
We opened TipRanks ‘Insiders’ Hot Stocks Tool and made three bargains that insiders have done in the past few days. These are stocks with a price below $ 10, an upside potential of over 60% and a buy rating. Here are the details.
<p class = "Artboard-Atom Artboard-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Energy transmission LP (ET) “data-reactid =” 16 “>Energy transmission LP (ET)
We start in the energy industry, which has been hit by the collapse of the oil price below $ 35 a barrel. Nevertheless, it remains an important industry: It is indispensable in the modern economy and known for generating strong cash flows. Energy Transfer is a midstream company that controls pipelines, terminals, and storage tanks for petroleum and natural gas products in 38 states. The company’s activities are concentrated in two regions: Texas-Oklahoma-Louisiana and Midwest-Appalachia-Delaware.
Energy Transfer was on a solid foundation before market fluctuations began. The company saw year-over-year growth in the fourth quarter of 2019, exceeding earnings and revenue expectations. In addition, ET saw an annual 2% increase in distributable cash flow to $ 1.55 billion.
The strong cash flow is based on a strong dividend. ET pays out 30.5 cents, or $ 1.22 annually, quarterly, giving the stock a strong dividend yield of 18.1%. Given the company’s 11-year history of sustaining and slowly increasing payments, this dividend is a strong incentive for potential buyers.
In terms of insider activity, the mood here is very positive. In the past two days, two company directors and the COO have bought ET shares worth nearly $ 6 million. Director Ray Davis made the largest single purchase at $ 4.9 million, while another director, Ray Washburne, bought for $ 720,000 and COO Matthew Ramsey took over a position worth more than $ 99,000. These three were the latest in a series of insider purchases totaling more than $ 63.6 million.
Wall Street is impressed with Energy Transfer. Christine Cho, who writes for Barclays, sees strength in the company model and says: “Midstream assets are likely to be hit by poor NGL prices by 2020, while the NGLs and refined products segment is expected to benefit from the expanded pipe and fractionation capacity by 2020 becomes. ”
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Cho rated ET together with a with a purchase rating price target of 20 USD, which implies room for an impressive 197% upward trend. (To see Cho's track record, Click here) “Data-reactid =” 22 “> Cho gives ET a buy rating along with a price target of $ 20, which implies room for an impressive upward trend of 197%. (To see Cho’s track record, Click here)
In his comments on the share, Chopra writes: “Energy Transfer took a hit in the fourth quarter … The company announced a number of agreements with an unidentified major customer that would extend the terms of the contract between the company and Energy Transfer for various to the Eagle Ford and Delaware Basins until 2034 and 2040. ”
Energy Transfer has a high upside potential of 128% based on an average price target of $ 15.33 and a current stock price of $ 6.73. The stock holds a strong buy rating from analyst consensus based on 10 reviews including 8 purchases and only 2 holds. (See inventory analysis for energy transfer to TipRanks)
<p class = "Artboard-Atom Artboard-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "New York Mortgage Trust, Inc. (NYMT) “data-reactid =” 38 “>New York Mortgage Trust, Inc. (NYMT)
With our second share, we are entering the world of real estate investment trusts (REITs). These companies acquire, manage and lease a variety of real estate and / or mortgage-backed securities. Your income comes from rent and mortgage payments, administration fees and earned interest. They are required by law to return the lion’s share of the profit to investors and, as a result, generally have very high dividend yields. NYMT operates in the REIT niche for mortgage-related assets and financial assets. The property includes high-quality, variable-rate mortgage loans for residential real estate, commercial mortgages, and mortgage-backed securities that are not granted by an agency.
NYMT is another company that had a solid fourth quarter when COVID-19 messed up the markets. Not to mention the company’s dividend yield of 19.5% with an annualized payment of 80 cents per share. This means the payout ratio is 106%, which indicates that all corporate profits are paid out to investors. The dividend has been kept stable for the past three years.
With over $ 770,000 in recent insider purchases, it’s clear that the company’s executives have a very positive outlook on their company. Recent purchases include a $ 30,000 purchase by CFO Kristine Rimando Nario and a $ 235,000 purchase by President Jason Serrano. The largest recent purchases totaling more than $ 402,000 for 82,000 shares were made by CEO Steven Mumma. His stake in the company now exceeds 1 million shares.
The Maxim Group analyst Michael Diana said of NYMT: “In our view, NYMT deserves a premium rating for the group because it has been proven to maintain book value and have achieved strong returns (7-year average economic return of 13.3%) on his focus on credit strategies in an environment that we consider favorable for credit strategies. ”
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "He gives the share a buy recommendation and $ 7 price target that Shows room for upside potential of 66%. (To see Diana's track record, Click here) “Data-reactid =” 43 “> He gives the stock a buy rating and a target price of $ 7, indicating an upside potential of 66%. (To see Diana’s track record, Click here)
<p class = "Canvas-Atom Canvas-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "By Jones Trading, 5-star analyst Jason Stewart is Its bullish price target of $ 6.50, which implies an upside potential of 54% for the stock, supports a buy recommendation. (To watch Stewart’s track record, Click here) “Data-reactid =” 44 “> Jones Trading’s 5-star analyst Jason Stewart is also optimistic, and his price target of $ 6.50, which implies an upside potential of 54%, supports a buy recommendation Watching Stewart’s track record Click here)
In his comments, Stewart made an argument for the future stock: “We are increasing our EPS estimate for 2020 after taking into account improved return on sales and lower financing costs. A quick start to the year on the capital raising front combined with growth in the loan portfolio should continue to deliver attractive risk-adjusted returns. ”
With 4 recent buy-side reviews, NYMT has a unanimous consensus rating for strong buy analysts. The stocks are valued at a real discount rate of just $ 4.22, but the average price target of $ 6.75 shows plenty of room for growth in the next 12 months – up to 60%. (See New York Mortgage Trust stock analysis on TipRanks)
<p class = "Artboard-Atom Artboard-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Park Hotels & Resorts, Inc. (PK) “data-reactid =” 55 “>Park Hotels & Resorts, Inc. (PK)
We’ll end our list with another REIT today. As the name suggests, Park Hotels focuses on hotel real estate. The company has been independent since 2017 when it was spun off from Hilton Worldwide. Park remains closely associated with Hilton with Hilton properties in Orlando, Chicago, New Orleans and Honolulu and a minority stake in the capital, Hilton, Washington, DC. The company has a further 47 properties and generated sales of $ 2.8 billion and net income of $ 316 million in fiscal 2019.
Like the other stocks on this list, PK outperformed fourth quarter earnings estimates and reported the good news as markets began their roller coaster ride. Funds from Operations (FFO, a REIT equivalent to EPS) was 72 cents compared to the 69 cents forecast, while sales were $ 810 million, around 3.4% better than expected and 18% higher than last year.
The company’s dividend yield is high – at 20.7%, it is well above the S&P average and blows away government bonds. The $ 1.80 annualized dividend is paid quarterly at 45 cents, and the company adjusts the payment to profit. The current payout ratio is 149%.
The insiders bought shares and bought $ 1.67 million in the past few weeks. During current market fluctuations, directors Thomas Natelli and Thomas Eckert bought shares of $ 65,000 and $ 130,000, respectively. CEO Thomas Baltimore also bought 78,000 shares for $ 977,000.
The outlook among Wall Street analysts is optimistic. David Katz of Jefferies writes: “In our view, the potential opportunities for PK to improve its portfolio and accelerate growth are clear in the face of a variety of uncertainties. There are incremental synergies, an improved customer mix should bring benefits, and a prudent capital recycling strategy should reduce the NAV shift over time. We believe that proof of execution should be the catalyst for the appreciation. ”
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Katz repeats his buy recommendation for the share, but the price target was to $ 26, but this still points to an impressive upside potential of 179%. (To see Katz's track record, Click here) “Data-reactid =” 61 “> Katz confirms its buy recommendation for the stock, but lowers the price target to $ 26. However, this still points to an impressive upside potential of 179%. (To see Katz’s track record, Click here)
<p class = "Canvas-Atom Canvas-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Richard Hightower from Evercore ISI also checked PK and pointed to the Obvious risk: "As with the other lodging companies in our coverage, we take a stance on estimates that is below the lower end (the guidelines) unless and until the threat of the coronavirus for travel subsides." Nevertheless, Hightower sees still a lot of potential and gives the stock a target price of $ 26. (To see Hightower's track record, Click here) “Data-reactid =” 62 “> Richard Hightower from Evercore ISI also checked PK and pointed out the obvious risk:” As with the other accommodation companies in our reporting, we go “below the bottom”. (As a guide) Attitude to estimates unless and until the corona virus threat to travel subsides. “Still, Hightower sees a lot of potential and gives the stock a target price of $ 26. (To see Hightower’s track record, Click here)
Park Hotels analysts’ consensus rating for moderate buying is based on 7 ratings, including 5 on the buyers side. The shares are currently selling for $ 9.31 and the average price target of $ 26.83 indicates exceptional upside potential of 188%. (See Park Hotels stock research on TipRanks)