TipRanks
2 Stocks Flashing Signs of Strong Insider Buying
Tracking insiders’ stock purchases can make a viable investment strategy. Corporate insiders – the company officers and board members – are naturally positioned to be in the know, to know how company policies and performance will impact stock prices. They can use that knowledge to inform their own stock purchases – but not unfairly. By law, they must disclose publicly their own stock holdings, and the general public can learn from those purchases and sales. Insider moves can informative or uninformative. The latter are simple shifts in portfolio holdings, usually not of great magnitude, done to tweak an ownership percentage or adhere to a tax regulation. The informative moves, however, are different. These are the big-number buys and sells – and when an insider, or several insiders, start making informative share moves, market watchers should take note. These are signs that something big may be in store. TipRanks follows the insiders’ trades, making use of the publicly published stock moves to track them. The Insiders’ Hot Stocks page provides the scoop on which stocks the market’s insiders are buying so that you can make informed purchases. We’ve picked two stocks with recent informative buys to show how the data works for you. Brown & Brown (BRO) Brown & Brown is an insurance company – one that does over $2.3 billion in annual business. The company is based in Florida, boasts a market cap of $12.4 billion, has 300 office locations, and is the fifth largest insurance broker in the US. Brown & Brown deals in risk management, offering insurance products for customers of all sizes: government agencies, professional organization, businesses, corporations, and families and individuals. Brown & Brown has seen its revenues and earnings rise year-over-year during the corona crisis – which makes sense, as a stable and reliable insurance company should expect to see an increase in business during unsettled times. The 4Q20 results showed revenue of $642.1 million, up 10.9% yoy. Earnings came in at 34 cents per share, an increase of 25% yoy. On the insider front, Board of Directors member James Hay put down $433,750 for a purchase of 10,000 shares on January 29. This brings the insider sentiment here into positive territory. Truist analyst Mark Hughes, rated 5-stars by TipRanks, sees Brown & Brown as a solid choice for investors interesting in the insurance sector. “The company is generating solid organic revenue growth, margins should be steady-to-up this year, and M&A activity has been healthy, all of which should drive solid top- and bottom-line expansion in coming periods. We believe BRO shares remain a good way for investors to get exposure to the recovering economy and firming P&C pricing,” Hughes opined. In line with his optimistic approach, Hughes rates BRO a Buy, and his $55 price target indicates confidence in ~25% growth for the next 12 months. (To watch…
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