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TheStreet Open House

These 3 Insider Favorites Are Trading Significantly Below Target Price

Insiders, naturally, work at the companies in question and have more knowledge about the firm than outsiders, which is why their buying activity is carefully monitored by the investing community.

When they put their own money on the line to purchase their company’s shares it indicates they are bullish about the firm’s future, and believe current share price is undervalued.

[Related: Hedge Funds are Buying Up These 9 Stocks Trading Below Target Price]

Likewise, if a pool of analysts have placed their most pessimistic target price well above current values, it is a sign stocks are trading below their fair value.

These considerations went into creating the list below. These stocks have seen significant insider buying activity in the past six months, and are currently trading below their most pessimistic target price.

EXCLUSIVE OFFER: Jim Cramer’s Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he’s trading today with a 14-day FREE pass.

Regarding target price: We only focused on companies that have more than 5 analyst target prices (to make sure we only focus on companies that have decent analyst coverage). We were left with the three stocks listed in detail below.  List Average 1-Year Return: -26%:

1. Keynote Systems Inc. ( KEYN): Provides Internet and mobile cloud monitoring solutions worldwide. Market cap at $260.21M, most recent closing price at $14.48. Of the 5 analysts that have set a target price on the stock, the lowest price target stands at $17. This implies a potential upside of 17.40% from current levels around $14.48. Over the last six months, insiders were net buyers of 561,662 shares, which represents about 4.24% of the company’s 13.25M share float.

 

2. MannKind Corp. ( MNKD): Focuses on the discovery, development, and commercialization of therapeutic products for diabetes and cancer. Market cap at $636.57M, most recent closing price at $2.59. Of the 6 analysts that have set a target price on the stock, the lowest price target stands at $3. This implies a potential upside of 15.83% from current levels around $2.59. Over the last six months, insiders were net buyers of 31,269,350 shares, which represents about 33.24% of the company’s 94.08M share float.

 

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