Whitefish, MT / September 25, 2014 / With the Dow Jones Industrial Average and S&P 500 near record highs amid a more than five-year bull run, insider buying – normally a pretty good way to spot stocks at value levels – is drying up in 2014. Bloomberg reported on Monday that 7,181 insiders have bought their own stock through September 12, versus 23,323 selling shares. The report shows that while executives may have chilled on buying shares, they have picked up the pace on share repurchase programs this year to the tune of $275 billion in the first half of 2014, marking the second fastest clip since S&P Dow Jones Indices started tracking the data 16 years ago.
The pace of insider purchases may have slowed, but that doesn't mean that some executives still aren't putting their own money in, perhaps the strongest signal of confidence in the future because, as stated, more than 7,000 have this year. To name a few in the small cap space recently, Robert Watson (President and CEO), David Sides (EVP, COO) and several other insiders of Streamline Health Solutions (NASDAQ: STRM) just purchased shares with the stock at 52-week lows. Andrew Heyward, CEO of Genius Brands International, Inc. (OTCQB: GNUS), has made several purchases of his company's stock as it sits at a one-year low, as have Mats Dahlin (director) and Bjorn Eriksson (CEO) at Neonode, Inc. (NASDAQ: NEON) and John Hatsopoulos (CEO) of American DG Energy Inc. (NYSE MKT: ADGE), to name just a few.
John Hatsopoulos has not only purchased 30,000 shares recently, but also has been buying shares of American DG Energy subsidiary EuroSite Power Inc. (OTCQB: EUSP), a company where he serves as Chairman of the Board,. At 45 cents, shares of EUSP are trading a dime above 52-week lows and below the 60-cent level that John Hatsopoulos was buying in June.
American DG Energy and EuroSite Power share the same business model as providers of On-Site Utility solutions, utilizing Combined Heat and Power (CHP) systems to offer clean electricity, heat, hot water and cooling solutions in the hospitality, healthcare, housing, education and leisure industries. Geography is the decided difference between the two, with EuroSite Power maintaining its focus in the United Kingdom and Europe from its offices in London, England, while Massachusetts-based American DG Energy is focused on the US and elsewhere.
John Hatsopoulos further demonstrated his commitment to American DG Energy and EuroSite Power last week, closing on a $3 million loan to EuroSite Power to fund additional growth in the company. In the most favorable of terms, the 5-year note comes with no pre-specified repayment terms other than a length of 60 months. Consolidated American DG Energy cash now totals $13.0 million and prepaid projects under construction is more than $3.7 million, putting the company in a solid position going forward.
In the same vein as Bloomberg hit on, corporate stock buy backs increasing this year to build shareholder value, American DG Energy said on Friday that its Board of Directors has authorized a new share repurchase plan. The company has authorized management to buy back up to one million ADGE shares in the open market, effective immediately.
With a triad of support, American DG Energy's board and management have delivered a strong vote of confidence in the future of the company and its subsidiary, EuroSite Power. If history is a guide, insider purchases tend to foreshadow a change in market sentiment, which would be beneficial to ADGE.
Interested parties are encouraged to read the complete press releases:
http://investors.americandg.com/2014-09-19-American-DG-Energy-Authorizes-Stock-Repurchase-Program
http://investors.americandg.com/2014-09-19-EuroSite-Power-Closes-3-Million-Loan
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SOURCE: Emerging Growth LLC