By itself, a stock purchase placed by a corporate insider can be a telling indication of the company's growth prospects. It can show that an executive in the know feels the shares are undervalued by the market.
When combined with a similarly bullish signal from a group of sell-side analysts, an insider buy can pack a more credible punch. An investor can take more comfort in knowing both the Street and insiders appear to be on the same page.
Here we look at a few stocks that check both boxes. In each case the recent insider buying activity and analyst opinions point to significant upside ahead.
Does LiveRamp Stock Have Good Upside?
LiveRamp (NYSE: RAMP) is a technology company formerly known as Acxiom. It provides data connectivity software that helps enterprises onboard data and uses offline data to market their products and services. LiveRamp's flagship platform is IdentityLink which connects consumers to their favorite brands using data and devices from both the physical and digital worlds.
Although all insider transactions hold value, when a company's CEO shows his cards by buying or selling, the market takes special interest. On June 16th. LiveRamp CEO Scott Howe bought 2,000 shares of the SaaS company to bring his direct holding to 713,309 shares. Mr. Howe also has an indirect interest of more than 3 million shares through a separately managed account and owns roughly 6% of the outstanding shares.
His latest purchase came at a time when LiveRamp's stock price had been nearly cut in half from its January 2021 peak. Since his buy at $42.67, LiveRamp has been on a roll and is closing back in on $50.
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Based on the opinions of the Street, it could have much more room to run. The last six firms to issue an update on LiveRamp called it a 'buy'. Price targets range from $75 to $95. On Friday, the stock got a big boost from news that Google will be delaying its plan to disable third-party cookies because it'll buy companies like LiveRamp more time for their alternative tracking solutions (ATS) to be explored in the marketplace.
Is AdaptHealth a Good Play on the Aging Population?
AdaptHealth (NASDAQ: AHCO) operates a national network of medical equipment companies across 35 states. Together they offer a wide range of products and services that support patients' health care needs in-home settings rather than in hospitals. This includes areas like diabetes, mobility, nutrition, sleep and respiratory therapy, ventilation, and wound care.
From an investment standpoint, the most attractive aspect AdaptHealth's business model is the high level of recurring revenue. Nearly 90% of revenue comes from resupply sales and rentals with the remainder derived from one-time product sales. It's a model that has delivered accelerating top-line growth including 11.5% growth last quarter.
The Street is rather bullish on the company's prospects for further growth as the country's aging population leans more on in-home care solutions. Seven of eight analysts call AdaptHealth a 'buy' and one a 'hold'. Last week Jeffries called the $30 stock a buy and gave it a $48 target price.
Newly appointed Co-CEO Stephen Griggs has also been thinking AdaptHealth stock is undervalued. Last month he showed his confidence in the company by purchasing his first 4,000 direct shares at a weighted average price of $24.135. He owns approximately 3.5 million shares in a revocable trust. It's always an encouraging sign to see a new leader make a statement purchase right off the bat.
Is Custom Truck One Source Stock a Buy?
Custom Truck One Source (NYSE: CTOS) is a rental equipment company that may be an interesting way to play the infrastructure spending boom. It provides specialized truck and heavy equipment rentals and sales as well as aftermarket parts and service to construction, building, telecom, and utility customers across the U.S.
In December 2020, Custom Truck One Source was acquired by Nesco Holdings for $1.475 billion. It still trades as a standalone company and the stock has trended higher since.
Aside from its potential as a beneficiary of government infrastructure spending, CTOS has the backing of both analysts and insiders. All three firms that have offered an opinion this year call it a buy and the target prices are consistently in the $12.00 to $12.50 range. Earlier this month Citigroup started coverage and said the stock still has more than 30% upside.
Insiders have also been unanimously bullish on CTOS since April 2021. A dozen different executive and board members have acquired or bought shares in the wake of the Nesco acquisition. Perhaps the most compelling insider move was director Mark Ein's $5 million purchase that seemed to open the flood gates for other insider buys.
Custom Truck One Source's first-quarter results beat handily on the top and bottom lines. Given the clear support of insiders and analysts, this is one small-cap infrastructure play that can keep trucking ahead.
Companies in This Article:
|Company||Current Price||Price Change||Dividend Yield||P/E Ratio||Consensus Rating||Consensus Price Target|
|Custom Truck One Source (CTOS)||$7.79||flat||N/A||-11.46||Buy||N/A|