3 Stocks with Bullish Insider Activity

3 Stocks with Bullish Insider Activity

When a corporate insider purchases shares of the company they intimately know, this can be a telling sign of where the stock may be headed. The signal becomes even more powerful when multiple insiders pile into a stock.

While some investors dismiss insider activity as invaluable, others find it to be a useful tool when choosing companies that are undervalued or have good growth prospects. Here we provide a few examples of recent insider buying that could be clueing the market into some future outperformers.

Why Did Intel's CEO Receive $10 Million in Intel Stock?

In mid-February Pat Gelsinger took over the CEO role at Intel (NASDAQ:INTC). It came with much fanfare over his potential to strengthen the company's position in a global semiconductor manufacturing space facing intense competitive pressures. It didn't take long for him to make a big splash.

Last month, Mr. Gelsinger announced plans to expand manufacturing capabilities and become a major foundry capacity provider for fabless semiconductor makers. Intel will invest $20 billion in a pair of new fabrication plants at its Arizona location asserting its position as a key cog in computer chip manufacturing. As part of the strategy, the company also plans to make greater use of third-party plants to support production in anticipation of strong demand for computing power as the economic rebirth unfolds.

Soon before the March 24th announcement, on March 18th, Mr. Gelsinger put his money where his mouth is in acquiring nearly $10 million worth of Intel stock. The award was incentivized by the company's offer to give him a matching number of shares if he bought as much as $10 million of Intel, but also reinforced his confidence in Intel's direction.


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The stock has since trended higher and is closing in on its pre-pandemic peak of $69.29. If Intel's strategy starts to show signs of success, it won't be long before the September 2000 record high of $75.69 is eclipsed.

 Will Wayfair Stock Keep Going Up?

As big as the Intel insider buy was, the purchase made by Wayfair (NYSE:W) director Michael Andrew Kumin last month was way bigger. On March 4th, Mr. Kumin purchased $13.6 million worth of the online retailer's stock at an average price of $283.50.

Most of the board member's purchases were made on behalf of TOF Capital where Mr. Kumin is a managing member. The 48,000 share buy order brought TOF Capital's total number of shares to 56,000. While he is considered an indirect beneficiary of these holdings, Mr. Kumin also has a direct position in Wayfair stock to the tune of 244,941 shares via a personal account and a retirement trust of private equity firm Great Hill Partners.

The timing of the buy was interesting for two reasons. First, Wayfair shares had already soared 150% last year and at the time were moving higher in 2021. The company has been a major beneficiary of heightened consumer demand for home furnishings and home office needs during the pandemic. Second, Mr. Kumin's last Wayfair purchase in 2019 was much less at $3.2 million when Wayfair was trading around $100.

This was therefore a very strong demonstration of faith in Wayfair's long-term growth prospects. The large purchase has since sparked a rally in Wayfair and has the market thinking the company will not be simply a one-hit pandemic wonder. Given widespread expectations that there will be some level of permanence to remote work arrangements, demand for home décor could send this e-commerce winner way higher.

Is it a Good Time to Buy Harley-Davidson Stock?

In the case of Harley-Davidson (NYSE:HOG) the insider buying activity has been spread out over time rather than through one huge purchase. However, this can be an equally potent trading signal.

In the first week of February, a whopping 22 Form 4's were filed with the SEC denoting insider transactions in Harley-Davidson equity. Every single one of them was a buy.

The purchases were made by a wide range of insiders including the CEO, CAO, CCO, and several other executives. Although the purchases were relatively small individually, in total they amounted to more than $1 million. The breadth of the buying is particularly compelling as it shows many are on board with Harley's growth trajectory rather than just one large, wealthy insider.

The timing here was also interesting because the flurry of buying activity took place on the heels of Harley-Davidson's disappointing fourth-quarter earnings report. This shows that insiders are still encouraged by what's going on at the company and were just biding their time to buy until after the earnings release.

Not surprisingly, Harley-Davidson shares have since trended higher. But it is not too late to capitalize on this insider buy signal. The company is still in the very early stages of a five-year strategic transformation focused on growing its most profitable businesses, expanding into new product lines, electric motorcycle development—and offering stock to employees.

In addition, demand for motorcycles is likely to accelerate as the job market improves, discretionary spending budgets strengthen, and the summer riding season gets underway. Company insiders certainly seem to be high on the 'HOG'—and investors want to hop on for the ride.

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Companies in This Article:

CompanyCurrent PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Wayfair (W)$60.23-1.2%N/A-9.24Moderate Buy$74.68
Intel (INTC)$42.71+0.2%1.17%109.52Hold$41.48
Harley-Davidson (HOG)$40.73-0.7%1.69%8.45Moderate Buy$45.43
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