The S&P 500 traded above its 200 day moving average last week for the first time since March 5. Back on March 23, at the bottom of the crash, the index was 28% below its 200 Day MA. The market has seen an amazing “bounce” since then. But many stocks — mainly those hurt most by the Covid-19 lockdown — still trade 20% or even 50% below their long term moving averages. Might these stocks belatedly follow the S&P and revert higher? Below we look at insider buying in Covid-impacted stocks, where insiders may be signaling that higher prices are likely.
No stock indicator is more widely followed than the 200 Day Moving Average. The 200 Day MA is simply the average closing price of a stock or index over the last 200 trading days, typically plotted as a line on a price chart. The significance of that particular moving average — rather than, say, the 50 day MA — is debatable. But there is a long history of using a stock or index price vs its 200 day moving average as the demarcation of whether the security is in an uptrend or a downtrend.
S&P 500 ETF (SPY) with its 200 day moving average.
Covid-impacted stocks trading >20% below their 200 day moving averages. Insider buying may be a precursor to mean reversion profits.
The 200 day MA can also be used as a long-term overbought/oversold indicator. The further a stock’s price moves from the moving average, the more likely that mean reversion will exert its force, and pull the stock back to the average.
But how does one distinguish the unfairly punished stocks from those destined for further losses or even bankruptcy? A possible signal of upward mean reversion may be insider buying. No one knows better than officers and directors — who have proprietary knowledge about their own companies — whether a stock is a good bet to trade higher in the months ahead.
Insider buying in Covid-impacted stocks. Below are stocks trading more than 20% below their 200 day moving averages. These stocks have seen at least $100K of insider buying over the last two weeks. Use this list as an initial screen — do more research before risking any capital.
Source: WhaleWisdom.com
| Most recent Filing | Company | Ticker | Industry Group | % Below 200 MA | # Insiders | Last Trade | Total Shares | Avg. Price | Total |
| 15-May-2020 | Kaman Corp. | KAMN | Aerospace/Defense | -22% | 1 | 14-May-2020 | 3,300 | 30.56 | $ 100,834.14 |
| 15-May-2020 | Harley-Davidson, Inc. | HOG | Automotive | -25% | 2 | 13-May-2020 | 64,520 | 19.42 | $ 1,252,781.38 |
| 15-May-2020 | Hanmi Financial Corp. | HAFC | Banking | -40% | 5 | 15-May-2020 | 14,000 | 7.74 | $ 108,383.89 |
| 28-May-2020 | Malvern Bancorp, Inc. | MLVF | Banking | -33% | 4 | 26-May-2020 | 13,319 | 10.99 | $ 146,418.81 |
| 15-May-2020 | Rbb Bancorp | RBB | Banking | -24% | 2 | 14-May-2020 | 12,000 | 10.97 | $ 131,626.41 |
| 15-May-2020 | Simmons First National Corp. | SFNC | Banking | -21% | 1 | 13-May-2020 | 10,000 | 14.77 | $ 147,700.00 |
| 15-May-2020 | S&T Bancorp Inc. | STBA | Banking | -31% | 3 | 14-May-2020 | 5,600 | 20.54 | $ 115,044.01 |
| 15-May-2020 | Spirit Of Texas Bancshares,… | STXB | Banking | -28% | 2 | 14-May-2020 | 25,000 | 9.74 | $ 243,540.00 |
| 18-May-2020 | Deluxe Corp. | DLX | Commercial Services | -34% | 1 | 15-May-2020 | 7,700 | 19.53 | $ 150,344.70 |
| 15-May-2020 | Conduent Inc | CNDT | Computers | -49% | 1 | 14-May-2020 | 55,560 | 1.8 | $ 100,008.00 |
| 27-May-2020 | Ballantyne of Omaha Inc. | BTN | Consumer Durables | -32% | 1 | 26-May-2020 | 82,250 | 1.52 | $ 124,997.03 |
| 18-May-2020 | Brinks Co. | BCO | Diversified Services | -41% | 1 | 14-May-2020 | 3,173 | 33.82 | $ 107,345.00 |
| 19-May-2020 | Cardtronics Plc | CATM | Diversified Services | -22% | 4 | 15-May-2020 | 54,523 | 18.82 | $ 1,026,225.62 |
| 26-May-2020 | Cross Country Healthcare Inc. | CCRN | Diversified Services | -29% | 8 | 22-May-2020 | 89,190 | 5.19 | $ 463,328.84 |
| 15-May-2020 | Accelerate Diagnostics, Inc. | AXDX | Electronics | -41% | 1 | 13-May-2020 | 89,055 | 9.46 | $ 842,460.31 |
| 18-May-2020 | Cubic Corp. | CUB | Electronics | -24% | 3 | 14-May-2020 | 4,350 | 32.31 | $ 140,539.05 |
| 20-May-2020 | Regional Management Corp. | RM | Financial Services | -29% | 4 | 18-May-2020 | 113,794 | 11.59 | $ 1,318,769.38 |
| 15-May-2020 | GSC Investment Corp | SAR | Financial Services | -24% | 1 | 14-May-2020 | 8,000 | 12.65 | $ 101,160.00 |
| 22-May-2020 | Andersons Inc. | ANDE | Food and Beverage | -37% | 1 | 21-May-2020 | 17,513 | 11.52 | $ 201,749.77 |
| 22-May-2020 | Hf Foods Group Inc. | HFFG | Food and Beverage | -47% | 1 | 22-May-2020 | 53,786 | 6.45 | $ 346,699.19 |
| 27-May-2020 | United Insurance Holdings C… | UIHC | Insurance | -28% | 3 | 26-May-2020 | 13,732 | 7.56 | $ 103,805.15 |
| 27-May-2020 | Royal Caribbean Cruises Ltd. | RCL | Leisure | -36% | 1 | 26-May-2020 | 20,000 | 48.63 | $ 972,518.00 |
| 20-May-2020 | Entercom Communications Corp. | ETM | Media | -47% | 1 | 20-May-2020 | 1,200,000 | 1.32 | $ 1,584,000.62 |
| 19-May-2020 | Equitrans Midstream Corp | ETRN | Pipelines | -22% | 1 | 19-May-2020 | 45,000 | 7.97 | $ 358,650.00 |
| 26-May-2020 | Armada Hoffler Properties, … | AHH | Real Estate | -38% | 1 | 20-May-2020 | 43,918 | 7.93 | $ 348,269.72 |
| 15-May-2020 | Preferred Apartment Communi… | APTS | Real Estate | -34% | 1 | 14-May-2020 | 50,000 | 6.18 | $ 308,950.00 |
| 15-May-2020 | Hersha Hospitality Trust | HT | Real Estate | -49% | 2 | 14-May-2020 | 30,000 | 3.76 | $ 112,909.00 |
| 15-May-2020 | Front Yard Residential Corp… | RESI | Real Estate | -31% | 2 | 15-May-2020 | 393,509 | 6.23 | $ 2,452,074.50 |
| 18-May-2020 | RPT Realty | RPT | Real Estate | -44% | 6 | 15-May-2020 | 37,000 | 4.98 | $ 184,140.00 |
| 19-May-2020 | Store Capital Corp | STOR | Real Estate | -32% | 2 | 15-May-2020 | 6,600 | 17.46 | $ 115,225.80 |
| 19-May-2020 | Whitestone Reit | WSR | Real Estate | -38% | 1 | 18-May-2020 | 18,000 | 5.75 | $ 103,500.00 |
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This investment blog (the “Blog”) is created and authored by Mark W. Gaffney (the “Content Creator”) and is published and provided for informational and entertainment purposes only (collectively, the “Blog Service”). The information in the Blog constitutes the Content Creator’s own opinions. None of the information contained in the Blog constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. You understand that the Content Creator is not advising, and will not advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. To the extent any of the information contained in the Blog may be deemed to be investment advice, such information is impersonal and not tailored to the investment needs of any specific person.
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