The S&P/TSX composite index was down more than 700 points at its open Monday morning. The Dow Jones Industrial Average and the S&P 500 also saw dramatic lossesThe Associated Press
Amid the broad market selloff, some compelling stock buys may be opening up in a wider range of sectors.
That's at least the signal being sent by corporate insiders. Buying activity among executives has expanded from energy to several sectors, including transportation, consumer non-cyclicals and insurance, according to INK Research, a firm that monitors legal security transitions among officers and directors within their own businesses.
Last week, the TSX overall saw insiders buying three stocks for every one with selling, according to INK, as buying interest spread beyond the energy sector.
"The opportunities are becoming more diversified," said Ted Dixon, chief executive officer of INK Research. "There's a broader sense of value emerging from this stock market sell-off. We're seeing buying in some of the more defensive areas; we've seen buying in more economically sensitive areas.
Generally speaking, for investors who are looking for either side of the equation – defensive or growth-oriented – now we're starting to see signs in both those areas."
Sectors that are considered defensive include utilities, telecommunications, health care and consumer non-cyclicals. Economically sensitive sectors include energy, basic materials, industrials and consumer discretionary, according to Mr. Dixon.
For transportation, Chorus Aviation, Canadian National Railway and Air Canada have all seen some insider buying. Richard McCoy, director at Chorus, bought into Chorus this month; Donald Carty, a director at Canadian National Railway, bought close to 10,000 shares in the company on Aug. 21; and James Tabor, Air Canada's vice president of system operations control, bought into Air Canada this month.
For insurance, Industrial Alliance Insurance and Financial Services Inc. also saw heavy insider buying activity in August. Renée Laflamme, an executive vice-president, Michael Stickney, president of IA American Life Insurance Company, and director Danielle Morin all bought into the company over the past 30 days. Insider pick-up at insurance companies are important because "insurance companies are often viewed as market-sensitive, and so seeing insiders pick up shares is encouraging from a financial sector perspective," Mr. Dixon said.
Other notable buying activity was seen at Atlantic Power Corp., what Mr. Dixon said is considered yield-sensitive stock, with its president and CEO James Moore Jr. gobbling up at least 50,000 shares, and director Gilbert Palter picking up at least 24,300 shares. At Precision Drilling Corp., director Brian Gibson purchased 15,000 shares on Aug. 25.
Valeant Pharmaceuticals International Inc., Cameco Corp., and Silver Standard Resources also saw some key insider buying activity over the past month.