Company insiders who put skin in the game.

Every decent CEO is going to put a positive spin on the outlook for his or her company. But investors who are buying shares of that company’s stock are putting up their hard-earned money and potential retirement savings based on that positive outlook. However, when management and company insiders are backing up those words with actions and buying shares of stock themselves, investors can be a bit more confident that the narrative isn’t just blind optimism. Here are eight stocks with insider buying and five-year projected earnings growth rates of at least 10%, according to CFRA.

Next:Advance Auto Parts (ticker: AAP) Credit

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Advance Auto Parts (ticker: AAP)

Analyst Garrett Nelson says Advance Auto Parts’ same-store sales should continue to grow by between 1% and 2.5% this year, down from 2.3% in 2018. However, he said Advance and other auto parts retailers will continue to benefit from a record-high U.S. vehicle age. In March of 2018, CEO Thomas Greco purchased 8,640 shares of AAP stock valued at more than $1 million. In August, director Nigel Travis followed up by buying another 1,250 shares of stock. CFRA has a “hold” rating and $180 price target for AAP stock.

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Company insiders who put skin in the game.

Every decent CEO is going to put a positive spin on the outlook for his or her company. But investors who are buying shares of that company’s stock are putting up their hard-earned money and potential retirement savings based on that positive outlook. However, when management and company insiders are backing up those words with actions and buying shares of stock themselves, investors can be a bit more confident that the narrative isn’t just blind optimism. Here are eight stocks with insider buying and five-year projected earnings growth rates of at least 10%, according to CFRA.

Advance Auto Parts (ticker: AAP)

Analyst Garrett Nelson says Advance Auto Parts’ same-store sales should continue to grow by between 1% and 2.5% this year, down from 2.3% in 2018. However, he said Advance and other auto parts retailers will continue to benefit from a record-high U.S. vehicle age. In March of 2018, CEO Thomas Greco purchased 8,640 shares of AAP stock valued at more than $1 million. In August, director Nigel Travis followed up by buying another 1,250 shares of stock. CFRA has a “hold” rating and $180 price target for AAP stock.

Concho Resources (CXO)

Concho is a U.S. oil and gas producer with operations primarily in the Permian Basin. Analyst Stewart Glickman says the company has a much healthier balance sheet than any of its oil and gas peers, but its stock is trading at roughly a 50% discount to its historical valuation levels. Director Mark Puckett bought 2,000 shares of CXO stock in August 2018, and director Gary Merriman bought another 4,000 shares worth $446,000 early this year. CFRA has a “buy” rating and $133 price target for CXO stock.

Huntington Ingalls Industries (HII)

Huntington Ingalls is the largest military shipbuilder in the United States. Analyst Jim Corridore says margins may shrink a bit in the next two years, but he is bullish overall on the defense sector. He is projecting 2.5% revenue growth in 2019 and 2% growth in 2020. In May 2018, director Stephen Wilson, director Philip Bilden and officer Edgar Green combined to purchase 2,920 shares of HII stock valued at a combined $635,000. CFRA has a “buy” rating and $255 price target for HII stock.

Schlumberger (SLB)

Schlumberger is the world’s largest oil services company. Analyst Paige Marcus says Schlumberger is simply too much of a value to ignore after shares dropped 30% in the fourth quarter of 2018. The sell-off also pushed Schlumberger’s dividend yield to an appealing 4.4%. Going back to March 2018, a handful of Schlumberger insiders, including CEO Paal Kibsgaard, have been buying up SLB stock. The group has purchased a combined 52,000 shares worth more than $3 million in that time. CFRA has a “buy” rating and $51 price target for SLB stock.

Valero Energy Corp. (VLO)

Valero is the largest independent oil refiner in the U.S. Glickman says the company’s Gulf Coast operations are appealing to key export markets such as Europe and South America. Operating cash flow is expected to exceed capital spending in 2019 significantly, and Valero also pays an appealing 4.1% dividend yield. Since October, directors Paulett Eberhart, Randall Weisenburger and Stephen Waters combined to buy 25,560 shares of VLO stock worth roughly $1.87 million. CFRA has a “buy” rating and $98 price target for VLO stock.

Encana Corp. (ECA)

Encana is a North American offshore oil and gas producer. Marcus says the stock is significantly undervalued compared to both its own historical levels and its current peer group. He says leverage and integration risks related to the Newfield merger are more than priced into the stock after a 40% sell-off from October highs. Since the beginning of 2018, a dozen Encana insiders, including CEO Doug Suttles, have combined to purchase 355,000 shares of ECA stock worth more than $3 million. CFRA has a “buy” rating and $8.50 price target for ECA stock.

Wynn Resorts (WYNN)

Wynn is one of the largest U.S. casino operators. Analyst Tuna Amobi says Macao showed relative strength in the fourth quarter of 2018, and Wynn will also benefit from expansion projects in Macao and Las Vegas and a new casino opening in Boston. CFRA projects 6% revenue growth in 2019 ramping to 7.7% growth in 2020. In November, director Philip Satre purchased 9,800 shares of WYNN stock valued at more than $1 million. CFRA has a “buy” rating and $150 price target for WYNN stock.

Cimarex Energy (XEC)

Cimarex is a U.S. oil and gas producer with reserves slightly skewed toward gas. Glickman says Cimarex has a better cash flow outlook than many of its peers, and the stock deserves a premium valuation. He says Cimarex’s pending acquisition of Resolute Energy should increase production by about 18%. Cash flow guidance is likely conservative, and the capex budget is relatively modest, he says. Since June 2018, director Lisa Stewart purchased 1,172 shares of XEC stock valued at more than $100,000. CFRA has a “buy” rating and $84 price target for XEC stock.

Stocks that company insiders are buying.

Advance Auto Parts (AAP)Concho Resources (CXO)Huntington Ingalls Industries (HII) Schlumberger (SLB)Valero Energy Corp. (VLO)Encana Corp. (ECA)Wynn Resorts (WYNN)Cimarex Energy (XEC)1 of 11

Wayne Duggan, Contributor

Wayne Duggan has been a U.S. News & World Report contributor since 2016. He is an expert at ...  Read more

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