Key Points
- Insider buying in these stocks is significant because it is broad-based, compounded by institutional activity, and an outlook for sustained growth.
- Matador Resources is a growing independent energy company with operations in Texas that pays dividends.
- V2X, Inc. provides mission-critical technology, support, and services in the defense and industrial sectors.
Insider buying in Matador Resources (NYSE: MTDR) and V2X, Inc. (NYSE: VVX) highlights their stocks' value and growth opportunity. The critical takeaways are that insiders aren’t and haven’t sold shares in years, the buying picked up in Q3 and it is broad-based, indicating a high conviction among executives.
Matador Resources Insiders Buy After Record Quarter and Increased Guidance
Matador Resources insiders have only bought their stock for years, Insidertrades.com tracks no sales, and activity ramped to a record high in Q3. Purchases were made by multiple directors, the CEO, CFO, COO, CAO, and an EVP, with the CEO and CAO each making more than one buy. Their activity topped $600,000, equal to roughly 1% of the market cap with shares near $52.50, and brings total holdings to over 6%. Their buying is amplified by institutional activity which is mixed, there is some selling and some buying, but net bullish quarterly for six consecutive quarters, bringing their total holdings in this independent energy company to over 90%.
Among the reasons for the buying is operational growth and quality. The 2024 results include a return-to-growth with production and revenue exceeding guidance, and operational efficiencies related to acquisitional synergies and advancing technology in drilling and well production. Q2 highlights include record production and increased guidance not including a recent acquisition. The company is on track to close on its latest transaction in the current quarter, boosting production, proven reserves, and potential for unproven oil and natural gas reserves.
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The salient details for investors are that this company is profiting, margins are improving, and free cash flow is robust. Free cash flow in FQ2 2024 was up more than double the prior year, providing a free cash flow margin of nearly 20%. Cash and cash flow are used for acquisitions, allowing for capital returns while maintaining a fortress balance sheet.
Although cash is down, the decrease is due to acquisitions and CAPEX that will improve production and operational quality and is offset by increased assets. Balance sheet highlights include increased current and total assets. Total assets are up 10%, liability is down, and equity is up. Equity is up about 17% YOY with long-term debt less than 0.6X, leaving the company in a strong position to continue its growth strategy.
Analysts rate Matador Resources as a Moderate Buy and view it as a deep value. The stock is trading 15% below the lowest price target on record and more than 40% above the consensus, with the consensus up compared to 2023 and holding steady near the 2024 highs.
V2X, Inc Insiders Buy: Stock on Track for New Highs as Business Booms
Insidertrades.com data indicates that V2X, Inc. insiders have only bought their stock for more than four years, with purchases hitting a multi-year high in Q3. Purchases are broad-based, including a director, the CEO, CAO, CHR, and Treasurer, putting insider holding at just over 1%. The 1% is small but compounded by a high 95%, institutional interest and a spike in institutional activity in Q3. Institutional activity is mixed in 2024, with the Q2 balance a sell, offset by a multi-year high in purchases for Q3. Institutional activity is also noteworthy for its breadth. Fund managers, including Vanguard and BlackRock, hold significant amounts of stock but less than 10% between them.
The company’s 2024 results are good. V2X is sustaining growth following the triple-digit gain in 2023 and accelerating sequentially. The guidance from Q2 suggests the strength will continue, up from the Q1 forecast and above consensus at the top and bottom lines, driven by demand for its mission-critical defense operations support services and communications technology. Analysts rate this stock as a Buy and see it trading near fair value at $53.50.
Companies in This Article:
| Company | Current Price | Price Change | Dividend Yield | P/E Ratio | Consensus Rating | Consensus Price Target |
|---|
| V2X (VVX) | $57.74 | 0.0% | N/A | -444.15 | Buy | $59.00 |
| Matador Resources (MTDR) | $54.11 | +1.3% | 1.48% | 7.41 | Moderate Buy | $75.67 |
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.
