Eurozone: Investors Are Waiting for Proactive Steps
With no clear indication of what will happen in the eurozone, and a whirlwind of speculation on finances at home and abroad, investors are reasonably tired of the shaky middle ground. But for now, analysts are largely in agreement that the next steps taken in Europe will ultimately decide the fate, or pace, of a global economic slowdown.
Let's start with Italy, Europe's third-largest economy. The country's debt has landed it in a bit of a bad spot, and the nation looks increasingly likely to require outside support, but who would give it? Rumors were leaked (and quickly denied) that the International Monetary Fund was considering launching an aid program with enough cash to support nearly half of the Italian bond market. The Asian stock market spiked, and then dropped, on the news.
Then there's Germany, with its embarrassing bond auction last week that left the national bank picking up millions in unwanted debt. Belgium's debt was downgraded on Friday, while Italy, Spain, and now France are gaining unwelcome headline coverage, and Greece is still Greece.
It all indicates, or rather proves, that market sentiment is dropping fast. Investors just aren't sure if the euro will survive, and they're not confident enough to hedge their bets on a surprise recovery.
According to CNBC, European finance ministers will meet yet again in Brussels this week. "Talk of new treaties and more austerity are likely to dominate as reporters push for off the record briefings on possible big bazookas."
"Carl Weinberg, the chief economist at High Frequency Economics believes the IMF's major backers like the U.S. and Japan are unlikely to support the fund throwing hundreds of billions at Italy or the eurozone."
These are volatile times in the market, and many investors are nervous. With that in mind, we wanted to focus on the stocks that are bucking the trend.
To create this list, we started with the top 50 best performing stocks over the last week. To refine the list, we collected data on insider transactions, and identified the names that have seen significant insider buying over the last six months.
These stocks are gaining ground during these volatile times, and insiders seem to be signaling that there's more upside to these names. Do you agree with their optimism?
Use this list as a starting point for your own analysis. List sorted by performance over the last week. (Click here to access free, interactive tools to analyze these ideas.)
List compiled by Eben Esterhuizen, CFA:
1. Global Partners (NYS: GLP) : Engages in the wholesale and commercial distribution of refined petroleum products and natural gas, and provides ancillary services in the United States and internationally. Over the last week, the stock has gained 6.11%. Over the last six months, insiders were net buyers of 37,400 shares, which represents about 0.54% of the company's 6.89M share float.
2. Jefferies Group (NYS: JEF) : Operates as a securities and investment banking company in the Americas, Europe, and Asia. Over the last week, the stock has gained 5.34%. Over the last six months, insiders were net buyers of 766,000 shares, which represents about 0.36% of the company's 213.56M share float.
3. Regeneron Pharmaceuticals (NAS: REGN) : Develops, and commercializes pharmaceutical products for the treatment of serious medical conditions in the United States. Over the last week, the stock has gained 5.18%. Over the last six months, insiders were net buyers of 675,375 shares, which represents about 0.95% of the company's 70.79M share float.
4. Mentor Graphics (NAS: MENT) : Mentor Graphics Corporation supplies electronic design automation systems used to automate the design, analysis, and testing of electronic hardware and embedded systems software in electronic systems and components worldwide. Over the last week, the stock has gained 4.65%. Over the last six months, insiders were net buyers of 63,313 shares, which represents about 0.07% of the company's 92.56M share float.
5. RLI (NYS: RLI) : RLI Corp., through its subsidiaries, underwrites property and casualty insurance primarily in the United States. Over the last week, the stock has gained 2.37%. Over the last six months, insiders were net buyers of 96,751 shares, which represents about 0.56% of the company's 17.23M share float.
6. Star Gas Partners (NYS: SGU) : Operates as a home heating oil distributor and services provider in the United States. Over the last week, the stock has gained 2.07%. Over the last six months, insiders were net buyers of 1,200,000 shares, which represents about 2.02% of the company's 59.43M share float.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Eben Esterhuizen and Rebecca Lipman do not own any of the shares mentioned above. Insider data sourced from Yahoo! Finance.
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