2 stocks flashing signs of strong insider buying
Tracking insiders’ share purchases can be a viable investment strategy. Of course, corporate insiders – the officers and board members – are able to understand how company policies and performance affect stock prices. You can use this knowledge to educate your own stock purchases – but not unfairly. The law requires them to publicly disclose their own holdings of shares, and the general public can learn from these purchases and sales. Insider movement can be informative or non-informative. The latter are simple shifts in portfolio holdings that are usually not of great magnitude and are used to optimize ownership or to comply with a tax regulation. However, the informative steps are different. These are the numerous buys and sells – and when an insider or insiders start making informative stock moves, market watchers should take note. These are signs that something big might be in store. TipRanks tracks the trades of the insiders and uses the publicly published stock movements to keep track of them. The Insider Hot Stocks page provides information on what stocks insiders in the market are buying so you can make informed purchases. We picked two stocks with recent informative purchases to show how the data works for you. Brown & Brown (BRO) Brown & Brown is an insurance company with over $ 2.3 billion in annual business. The company is headquartered in Florida, has a market capitalization of $ 12.4 billion, 300 office locations, and is the fifth largest insurance broker in the United States. Brown & Brown is a risk management company providing insurance products to clients of all sizes: government agencies, professional associations, corporations, corporations, and families and individuals. Brown & Brown saw year-over-year sales and earnings increase during the corona crisis – which makes sense since a stable and reliable insurance company should expect business to grow during troubled times. Fourth quarter 20 results showed revenue of $ 642.1 million, up 10.9% year over year. The result was 34 cents per share, an increase of 25% over the previous year. On the insider’s side, director James Hay spent $ 433,750 on January 29 to purchase 10,000 shares. This brings the insider sentiment into positive territory here. Truist analyst Mark Hughes, who was rated 5 stars by TipRanks, sees Brown & Brown as a good choice for investors interested in the insurance sector. “The company has solid organic sales growth, margins should remain stable this year, and M&A activity has been good, which should lead to solid sales and profit expansion in the coming periods. We believe BRO stocks will remain a great way for investors to get exposure to the recovering economy and stabilize P&C prices, ”said Hughes. In line with its bullish approach, Hughes is currently rating BRO a buy and its target price of $ 55 shows confidence in ~ 25% growth over the next 12 months. (To see Hughes’ track record, click here.) Is the rest of the street okay? As it turns out, the analyst consensus is more of a mixed bag. Almost exactly in the middle, 4 buy ratings and 5 holds were given in the last three months, which corresponds to the BRO status “moderate buy”. With an average price target of $ 51.44, the potential gain after twelve months is 17%. (See BRO stock analysis on TipRanks) Crown Castle (CCI) The second insider pick we look at, Crown Castle is a real estate investment trust with a twist. The company owns and manages the communication infrastructure, especially the tower and transmitter locations that are so important for cellular networks. Crown Castle’s real estate portfolio includes more than 40,000 towers, 70,000 small cell sites and 80,000 miles of fiber optic cables. The introduction of the new 5G wireless network last year was a boon to the Crown Castle model. Crown Castle’s revenues remained constant through 2020, ranging from $ 1.4 billion to $ 1.49 billion. The results for the third and fourth quarters were $ 1.49 billion each. For the fourth quarter, that was an 11% gain year over year. For the full year 2020, CCI reported $ 5.3 billion, up 3.8% year over year. Crown Castle’s position was solid enough that the company increased its dividend payment by more than 10% in December. The new payment of $ 1.33 per common share results in an annual payment of $ 5.32 and a yield of 3.2%. If we turn to insider trading, we find that one of the company’s directors, Kevin Stephens, paid $ 328,300 for a block of 2,000 shares. Stephens now owns $ 671,000 worth of CCI; This latest purchase almost doubled its total stake. Cowen-based 5-star analyst Colby Synesael is extremely optimistic about Crown Castle. He notes that CCI “has a new agreement with Verizon in which the carrier has agreed to lease 15,000 small cells from Crown that will be installed over the next four years …” The analyst added, “[We] Appreciate the average. The ARPU is $ 500 / month. (with a 1.5% escalator), which indicates an initial annual value of ~ $ 90 million. The deal is the company’s largest single small cell deal in its history. The deal increases Crown’s backlog for small cells from ~ 20,000 previously to ~ 30,000. “Synesael’s confidence is evident from its outperform valuation (ie purchase) of the stock. Its target price of $ 197 indicates a year-long upward movement of 21%. (To view Synesael’s track record, click here.) Overall, Wall Street analysts like what they see here. CCI’s Strong Buy Consensus Rating is based on 8 current ratings split into 7 purchases and a single hold. CCI’s average target price is $ 177.25, up 9% from the current share price of $ 177.25. (See CCI Stock Analysis on TipRanks.) To find great ideas for trading stocks at attractive valuations, visit TipRanks’ Best Stocks to Buy, ‘a newly launched tool that brings together all of TipRanks’ stock insights. Disclaimer: The opinions expressed in this article are solely those of the analysts presented. The content is intended to be used for informational purposes only. It is very important that you do your own analysis before making any investment.
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