Insider Purchases Of Stocks Are Considered Bullish
Insider buying has long been hailed as a bullish signal because there is really only one reason for an insider to buy more of the company they already own, they think the stock is undervalued and/or going to move higher. That’s why screens of insider buying can be so valuable. Our latest screen reveals a list of three stocks the insiders are buying and there is even better news. Along with the insiders' purchases, these stocks also come with other catalysts that we see driving their share prices higher.
Insiders Are Buying Business Services Company Dun & Bradstreet Holdings
Dun & Bradstreet Holdings (NYSE: DNB) is a business services provider specializing in decision critical data and analytics globally. The company’s revenue and earnings have been accelerating for the last 7 quarters and are on track to continue growing this year. The insiders were holding about 2% of the stock as of the end of 2021 but upped their holdings significantly in the 1st quarter. Director Cannae Holdings bought nearly 22 million shares which are worth about 5% of the shares outstanding. This puts total ownership at 7% and we think it could be on the rise. The last 8 or so transactions, spanning about 18 months, have all been purchases.
As for the other catalysts, Dun & Bradstreet Holdings is more than 5.0% short which is enough to help sustain a rally once it begins. The shorts are piling in due to a souring of sentiment among the analysts following the calendar Q4 2021 earnings report. The report was better than expected but only marginally so. The analysts still rate the stock a solid Hold leaning to Buy with a price target about 50% above the recent price action.
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Asana Moves Lower On Slowing Growth, Insiders Buy More
Shares of Asana (NYSE: ASAN) have been moving lower since hitting their peak in 2021 and the insiders have been buying all the way down. In fact, insider buying has been getting stronger on a quarter to quarter basis over the past 5 quarters and is peaking now only two-thirds of the way through calendar Q1 2022. In total, the insiders have bought nearly 11% of the market cap with shares trading near $33 bringing their total holding up to 54.4% of the company. In our view, those are some impressive numbers in a stock that was already worth keeping track of.
As for the short-sellers? The short-sellers have been piling into this name due to diminishing COVID-19 tailwinds and an outlook for slowing growth. The analyst at JPMorgan Chase sparked a 20% decline in the price by themselves when they cut their rating to Underweight and slashed the price target in half. The takeaway is that now, with shares of Asana trading near JPMorgan’s $32 target, the stock is about 90% below the consensus price target with a near-25% short interest. In our view, Asan is a ripe candidate for short-covering, short-covering rally, and short-squeeze.
Insiders Buy Global Industrial Company’s Value And Yield
Global Industrial Company (NYSE: GIC) operates as a marketer and distributor of brand name and private label industrial and business equipment globally. The company is well-positioned in that regard servicing all verticals in some fashion or other. Not only are the insiders buying this stock, but it is a value relative to the broad market and it pays a nice dividend as well. The insiders, one insider specifically, now-Chairman of the Board Richard Leeds, purchased 13% of the market cap in December 2021 bringing the total of insider holdings to a whopping 67% with the institutions holding another 30%.
As for the dividend, Global Industrial Company pays a nice 2.3% yield with shares trading near $32 and there is a positive outlook for distribution growth. The company is paying out only 35% of its earnings and has been increasing the distribution for 5 years. The distribution CAGR is running near 35% as well and, based on the balance sheet metrics, distribution increases could continue if not quite at a sustained 35% rate.
Companies in This Article:
| Company | Current Price | Price Change | Dividend Yield | P/E Ratio | Consensus Rating | Consensus Price Target |
|---|
| Dun & Bradstreet (DNB) | $12.37 | +0.7% | 1.62% | -154.69 | Moderate Buy | $13.83 |
| Asana (ASAN) | $14.73 | +5.7% | N/A | -12.81 | Hold | $14.27 |
| Global Industrial (GIC) | $27.93 | +2.3% | 3.58% | 16.43 | N/A | N/A |
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.
