With major U.S. stock indices climbing to fresh record highs this summer, many technology stocks have come along for the ride. Then there are tech companies whose share prices have gone in the opposite direction.
Investors who wish to determine which underperforming tech stocks are oversold have several tools at their disposal including fundamental analysis, valuation modeling, and technical analysis.
In addition, one of the most powerful ways to identify attractive technology stocks is to simply learn which stocks corporate insiders are buying. Purchases made by company executives, board members, or large institutional shareholders can be a valuable signal for retail investors because they indicate what key insiders think.
Let’s look at a few technology stocks that have seen significant insider buying during their recent slides.
Is Global Payments Stock Oversold?
Global Payments (NYSE: GPN) was one of the hottest stocks of last decade. The payment technology provider has been one of the biggest beneficiaries of the worldwide shift from cash and checks to electronic forms of payment. Its stock advanced every year from 2013 to 2020, a streak that is at risk of ending this year.
Down 19% year-to-date, Global Payments finds itself in unfamiliar territory and perhaps unfairly. Following a better than expected second-quarter report, the stock plunged 11%. Some investors were hoping for even better figures which combined with concerns about the rise of new fintech competitors sunk the shares to their lowest level since November 2020. An overreaction?
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CEO Jeffrey Sloan seems to think so. On August 5th, he purchased approximately a half-million dollars of Global Payments stock at an average price of $169.87. During last week’s earnings call Mr. Sloan attributed the company’s 56% jump in second-quarter EPS to the company’s differentiated strategies and strong relationships with the world’s leading technology companies.
Also on August 5th, Board member Joia Johnson bought roughly $100,000 of Global Payments stock. Since the high-volume selloff, the stock has curled upward in conjunction with insider support. And with most sell-side analysts calling the downturn a buy opportunity, Global Payments may be a bargain transaction at current levels.
Are RxSight Insiders Buying Shares?
Recent health care tech IPO RxSight (NASDAQ: RXST) is off to a tough start since making its Nasdaq debut on July 30th. The initial buzz around the stock faded quickly on day one and it is already more than 25% below its offering price.
Yet while the market may have lost faith in the company, its leadership has not lost sight of the long-term growth opportunity. On August 3rd, Chief Compliance Officer Eric Weinberg purchased 31,250 RxSight shares at $16. This was surrounded by a series of smaller purchases that were made by his fiancé which the SEC requires to be reported since Mr. Weinberg is considered to have an indirect ownership of those shares.
Several other RxSight insiders have been actively buying shares since the company went public. In total, $15.5 million worth of buys or acquisitions has occurred in the small-cap name. Among the most notable transactions was a $2 million purchase made by President & CEO Ronald Kurtz which also took place on August 3rd. Director Corley Anderson brought $1.25 million of RxSight on behalf of a living trust account.
RxSight has developed the world’s first and only intraocular lens that can be customized after cataract surgery called the Light Adjustable Lens. Based on special lens material, it lets the patient’s vision be optimized post-surgery whereas other cataract surgery technologies attempt to attain vision improvement prior to the procedure.
The company is targeting a global cataract surgery devices market that is forecast to expand by $1.6 billion over the next five years. Based on how active insiders have been, they appear to believe in RxSight’s ability to participate in this growth.
Is Voxx International Stock a Buy?
Auto technology company Voxx International (NASDAQ: VOXX) has trended lower since mid-February. With the global semiconductor chip shortage expected to impact vehicle production for some time, demand for things like driver assistance technology, security systems, and advanced mirrors is expected to be muted.
After a stellar 2020 in which the stock soared 191%, Voxx International finds itself back in microcap territory and is trading around $11.50 per share.
Over the last two weeks, board member and 10%-plus equity owner Beat Kahli has been busy accumulating more shares on the cheap. Across six separate days he bought nearly $800,000 of Voxx International on behalf of Avalon Park International, a subsidiary of a Swiss holding company he founded and leads.
After 5,100 shares were bought on August 6th, the entity held 350,000 Voxx International shares. The broader Avalon Park Group Holding AG organization owns more than 4 million of the 24 million shares outstanding which gives it a 16.7% stake in the company.
Just how soon the global auto market begins to recover remains to be seen. D.A. Davidson, the only Wall Street firm that covers Voxx International, has a ‘buy’ rating and $21 target price which suggests it can almost double from here. The consistent buying pattern of a key insider also suggests the turnaround is well worth the wait.
Companies in This Article:
| Company | Current Price | Price Change | Dividend Yield | P/E Ratio | Consensus Rating | Consensus Price Target |
|---|
| Global Payments (GPN) | $122.38 | -0.5% | 0.82% | 32.38 | Moderate Buy | $151.92 |
| RxSight (RXST) | $51.57 | -2.4% | N/A | -36.06 | Buy | $49.63 |
| VOXX International (VOXX) | $7.30 | +1.4% | N/A | -4.45 | | N/A |
