By Jacob Sonenshine
The stock market is dropping so it's time to go shopping. There are plenty of bargains, especially ones that have the added bonus of being snapped up by company insiders.
The S&P 500 is down almost 5% from its record high in January. The main reason is the war in Iran, which sent oil soaring and could push up interest rates, too.
Now, buyers will find names that look too beaten-down. The whole trade -- stocks down, oil up -- would reverse when the fighting eases, or ends. Even if the war drags on, the jury is still out on how much inflation the situation will stoke -- and stock prices already reflect much of the potential problem.
So, what are the stocks that look too beaten-down? Trivariate Research's Adam Parker ran a screen.
Parker identified 11 stocks that are on the cheaper side of the U.S. market in terms of forward price-to-earnings multiples, and are trading at multiples in the cheapest quartiles versus their historical averages. Each name also had to have more buying from company insiders -- executives, founders, and board members -- than selling in the past month.
Stocks that are cheap and have seen net insider buying in the past month average the highest risk-adjusted returns for the following month, Parker's data show.Remember, when an insider buys shares, it indicates that person knows something that the firm is doing -- or going to do -- to create value that the market will soon appreciate.
Parker's 11 stocks are Netflix, Walt Disney, Uber Techologies, DoorDash, Shopify, MercadoLibre, Medtronic, Blackstone, KKR & Co., Progressive, and Charles Schwab.
Charles Schwab has plunged in the past few weeks, first by the AI panic and now by oil -- as most economically sensitive sectors have been hammered.
Now, Schwab trades at about 15 times earnings, versus a high-teens P/E ratio early this year -- before all the selling took hold. Over the past five years, the stock has often traded at close to the S&P 500's multiple, which is currently just over 21.
The reality is that the stock is often worth a lot and can rally from oversold points, especially after macroeconomic shocks. After the Silicon Valley Bank crisis in early 2023, for instance, it got rocked along with other financials, and then returned 55% for the following 12 months, more than doubling the S&P 500's gain.
The company, with its millions of client accounts, is looking to sign up more people onto its trading platform and into the rest of its personal financial services. Analysts expect it to keep growing. The consensus forecast calls for almost 5% annual revenue growth, to $36.1 billion, by 2030, according to FactSet.
That can turn into 15% annual earnings-per-share growth, as management looks to expand profit margins, precisely because of AI. The firm its implementing AI tools to speed up financial analysis and customer acquisition without as many employees.
If you're looking to buy, there are plenty to choose from. Parker's screen is a great starting point.
Write to Jacob Sonenshine at jacob.sonenshine@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 09, 2026 13:39 ET (17:39 GMT)
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