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Land This Cheap Metals Stock Even Lower Than Director Sorrell Did

By Metals Channel Staff, Thursday, November 29, 1:30 PM ET
Play Video: One Reason For Insiders to Buy


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There's an old saying on Wall Street about insider buying: there are many possible reasons to sell a stock, but only one reason to buy. Back on October 11, Alcoa, Inc.'s Director, Martin Sorrell, invested $36,419.63 into 4,145 shares of AA, for a cost per share of $8.79. Bargain hunters tend to pay particular attention to insider buys like this one, because presumably the only reason an insider would take their hard-earned cash and use it to buy stock of their company in the open market, is that they expect to make money.

In trading on Thursday, bargain hunters could buy shares of Alcoa, Inc. (NYSE:AA) and achieve a cost basis 5.0% cheaper than Sorrell, with shares changing hands as low as $8.35 per share. It should be noted that Sorrell has collected $0.03/share in dividends since the time of their purchase, so they are currently down 4.6% on their purchase from a total return basis. Alcoa, Inc. shares are currently trading off about 0.1% on the day. The chart below shows the one year performance of AA shares, versus its 200 day moving average:

Alcoa, Inc. Chart

Looking at the chart above, AA's low point in its 52 week range is $7.97 per share, with $10.92 as the 52 week high point that compares with a last trade of $8.38. By comparison, below is a table showing the prices at which insider buying was recorded over the last six months:

Purchased Insider Title Shares Price/Share Value
10/11/2012 Martin Sorrell Director 4,145 $8.79 $36,419.63
11/27/2012 Ratan Tata Director 4,565 $8.34 $38,055.67

According to the ETF Finder at ETF Channel, AA makes up 2.95% of the SPDR S&P Metals and Mining ETF (AMEX:XME) which is trading up by about 0.7% on the day Thursday.

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This Article's Word Cloud:   Alcoa   Buying   Definition   Director   ETFs   Earnings   Importance   Insider   Martin   Metals   Price   Sorrell   Thursday   Value   What   about   above   basis   below   buying   chart   collected   comparison   cost   currently   hunters   insider   last   only   open   other   point   purchase   reason   recorded   retirement   secure   share   shares   showing   stock   that   their   they   this   trading   week   what   which   with

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