Key Points
- Hexcel insiders buy following an abrupt CEO change; analysts upgrade and lead the market higher.
- MasterCraft is a value after over-correcting to lower levels: institutions are gobbling it up.
- Harrow, Inc. launched two products and should pivot to profits soon; it is getting bought by insiders and institutions.
Unusual insider activity and changes in insider buying habits can signal opportunities that lead to investor gains. Today, we’re looking at three stocks that popped on Insidertrades.com's radar because of unusual insider activity in some interesting businesses investors should have on their radar. These companies are well-positioned to deliver value that may be unlocked this year.
Five Hexcel Insiders Buy Stock in Q2
Five Hexcel (NYSE: HXL) insiders bought stock in Q2, which is notable for several reasons. The first is that this is the first significant buying in many quarters; the second is because of who is buying. They include the new CEO, so don’t read too much into the news. However, purchases also included the old CEO, who did not need to buy more shares, and three directors. The purchases are a vote of confidence in the business and the new CEO. It's good news because the market was surprised by the move.
Institutions shed shares in Q2, primarily due to the announcement, but still hold 95% of the shares. Holders are diverse, including 10% positions by BlackRock and Vanguard and numerous others with positions of 1% to 8% of the stock. Analysts are also on board, rating the stock at Hold with a rising consensus price target 10% above the current action. The most recent revision is from Wells Fargo, issued in May, and it includes an upgrade to Over Weight and the new high target of $95 or 35% above the current action.
Potential catalysts for this market include its position in the aerospace, defense, and industrial sectors. Its carbon fiber products and services are in demand, with growth persisting in Q1 and expected to accelerate as the year progresses.
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MasterCraft Boat is Getting Gobbled Up By Institutions
MasterCraft Boat (NASDAQ: MCFT) had only one insider buy shares in Q2, but that insider bought shares ten times, bringing its holdings up to over 15% of the stock. The insider is Coliseum Capital Management, a private investment firm that focuses on building value long-term with undervalued companies. Its purchase activity began in 2023 and has ramped, hitting a record high in Q2. The activity also increased total institutional ownership to nearly 100% of the stock.
Analysts view MCFT stock as a Moderate Buy with deep value. The stock is trading below the analysts' lowest target, with a potential 12% upside at the consensus and another 25% if it moves to the range's high end. Potential catalysts for this stock include outperformance relative to the low bar set by analysts for FQ4 and an expected pivot back to growth in F2025. Analysts view calendar 2024 as a cyclical low for the recreational boat business and expect growth to continue long-term.
Harrow Has Deep Value for Investors
Harrow, Inc. (NASDAQ: HROW) is another stock getting gobbled up by institutions. Its Q2 insider activity includes purchases by the CEO and Opaleye Management. Opaleye Management is a private hedge fund focused on eye therapies; Harrow is its 2nd largest holding.
Among the attractions is Harrow’s portfolio, which includes a solid pipeline and two recently launched therapies. The first is an eye anesthetic; the other is a treatment for dry eyes that is gaining traction. The takeaway is that the company has entered its revenue phase and is expected to pivot to profitability over the next twelve months.
Only two analysts cover the stock, but they are bullish. They rate Harrow a solid Buy with a price target of $30 or 60% at their consensus mid-point. The low target of $26 implies a deep value and a 40% upside from current levels. The stock rebounds strongly following its latest earnings report and could reach those levels quickly. The next target for critical resistance is near $22 or about 20% of upside.
Companies in This Article:
| Company | Current Price | Price Change | Dividend Yield | P/E Ratio | Consensus Rating | Consensus Price Target |
|---|
| Harrow (HROW) | $42.44 | +6.9% | N/A | -45.15 | Buy | $56.67 |
| MasterCraft Boat (MCFT) | $20.59 | +0.3% | N/A | -89.52 | Hold | $21.25 |
| Hexcel (HXL) | $58.60 | -0.3% | 1.02% | 44.73 | Hold | $71.54 |
Experience
Thomas Hughes has been a contributing writer for InsiderTrades.com since 2019.
Areas of Expertise
Technical analysis, the S&P 500; retail, consumer, consumer staples, dividends, high-yield, small caps, technology, economic data, oil, cryptocurrencies
Education
Associate of Arts in Culinary Technology
Past Experience
Market watcher, trader and investor for numerous websites. Founded Passive Market Intelligence LLC to provide market research insights.
