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3 stocks flashing signs of strong insider buying
In order for a single investor to beat the market, you need an edge. Investment strategies come in a variety of forms and you can rely on several factors to help you achieve the ultimate goal of high returns. Be it after analyst reviews, upcoming catalysts or after recognizing the latest market-moving trends. There is another possibility: to follow the signal of the connoisseurs – the company insiders. These are the company’s senior executives, whose positions give them access to often privileged information about business plans and finances, as well as the experience needed to translate this into smart stock deals. And even better – they’re not completely free actors. These insiders are responsible to shareholders and board members for company profits and cannot use their inside knowledge for selfish purposes. This means that tracking their stock trades, especially their own businesses, can be a viable investment strategy. Fortunately, federal regulations require insiders to make their insider deals public – in order to maintain the playing field. To make this search easier, you can get started right away using TipRanks Insiders’ Hot Stocks tool. It identifies stocks where insiders have taken informative steps, highlighting some common strategies used by insiders, and gathering the data in one place. We picked three stocks with recent informative purchases to show how the data works for you. Calix, Inc. (CALX) The first stock we look at is Calix, a cloud computing technology company. Calix follows a subscription model and provides cloud software, systems, platforms, services and solutions for the communications industry. Calix’s products provide customers with real-time data and insights into their end users so they can monetize their business and customer interactions more efficiently. Like many high-tech software platform companies, Calix offers a system that can streamline operations – a key benefit in today’s growing remote work environment. The company’s revenue reflects its growth-oriented environment: Revenue grew year over year in each quarter of 2020, with the most recent quarter being the best in two years at $ 170 million. EPS rose 15% from the third quarter to 37 cents and was positive for the second quarter in a row – a performance the company has failed to match in the past two years. With that in mind, it’s no wonder this stock is being bought by insiders. The latest purchase is from board member Donald Listwin, who bought 20,000 shares and spent nearly $ 715,000. Cowen 5-star analyst Paul Silverstein notes that Calix has pursued an age-old strategy to beat forecasts: “The fourth quarter of 20 confirms our view that short and long-term profitability and cash flow remain significantly higher than Street’s modeled … we respectfully note that CALX has established a clear pattern of an appropriate and admirable attitude towards risk assessment, and at the same time, an attitude that is too promising and too promising. “Silverstein clearly likes Calix’s approach and rates the stock as outperforming (ie buying). In addition, the analyst gives the stock a price target of USD 45, which implies a one-year upward movement of 23%. (To see Silverstein’s track record, click here.) What does the rest of the street think? When it comes to consensus distribution, the opinions of other analysts are more widespread. 3 buys and 2 holds result in a moderate buy consensus. In addition, the average target price of $ 37.40 indicates a slight upward trend from current levels. (See CALX stock analysis on TipRanks) DXC Technology Company (DXC) DXC was founded in 2017, partly as a spin-off from Hewlett Packard Enterprises, and is a leader in business-to-business IT (B2B). The company’s products enable global companies to run their critical systems and operations efficiently while ensuring security and scalability at various levels. DXC’s enterprise technology improves performance and competitiveness, and therefore the customer experience. The company has seen a decline in sales over the past two years. Sales of $ 19.5 billion were achieved for the 2020 calendar year, but sales of ~ $ 18 billion are expected for the 2021 fiscal year. The most recently reported quarter, the third quarter of fiscal year 21, had sales of $ 4.29 billion, down 14.6% year over year. The profit, however, at $ 4.29, was far higher than the 80 and 96 cents reported losses in the previous two quarters. Despite the decline in sales, the company kept its dividend, paying 21 cents per common share last year, a current yield of 3.2%. If we look at the recent insider trading, we can see that board member Raul Fernandez made two purchases this month and bought 11,443. Fernandez paid nearly $ 300.00 for the new shares. In a comprehensive report on DXC, RBC analyst Daniel Perlin, rated 5 stars by TipRanks, writes: “We believe the results of FQ3 / 21 provide evidence that DXC’s transformation is proceeding. In terms of customer focus, we find that quarterly revenue increased 3.1% quarter over quarter and increased 1.7% in the second quarter … the second consecutive quarter of sequential improvements … ”Perlin cited several reasons for his bullish thesis: “1) Management that successfully implements its strategic plan and achieves its goals for fiscal year 22; 2) DXC is evolving into a full scale digital / emerging technology player designed to help offset declines in traditional solutions. and 3) the valuation is attractive compared to competitors, particularly given the potential upside of synergy targets. “Perlin is using these comments to support an outperform (ie buy) rating for DXC and a target price of $ 38 that indicates room for a robust uptrend of 46% over the next 12 months. (To see Perlin’s track record, click here.) Wall Street analysts have mixed views on the stock, as indicated by its 10 most recent ratings, including 4 buys and 6 holds. Taken together, this results in a consensus rating for analysts with a moderate buy. The average price target of USD 31 implies a one-year upward movement of 19% compared to the current trading price of USD 26.06. (See DXC stock analysis on TipRanks) Northern Oil and Gas (NOG) Last but not least, Northern Oil and Gas, a highly localized hydrocarbon explorer with assets in the states of Montana and North Dakota, particularly the Williston Basin. NOG owns large acreage in the area and owns the areas where developers will be drilling and completing oil and gas wells. This year, NOG has taken two steps to increase working capital. The second step was announced on February 8 – an 8.125% senior debt offering that matures in 2028. The proceeds will be used to repay various outstanding debts and interest obligations and to finance the acquisition of new natural gas plants. The proposed land acquisitions are in the Appalachian Mountains and will represent real expansion for Northern Oil and Gas. The first capital move, however, is more interesting for this current article. On February 4, the company announced that it would launch 12.5 million shares of common stock at a price of $ 9.75 per share. The capital raised will be used first to finance the purchase of land in the Appalachian Basin and then to repay debts and finance general operations – these are standard terms for this type of capital raising. The company’s board member, Stuart Lasher, bought 25,000 NOG shares a few days after the public offering was announced. The latest block of shares was picked up for $ 243,750. Clearly optimistic about this company’s expansion into a new region, Scott Hanold of RBC writes: “The acquisition of NOG in Appalachian was strategic in reducing leverage, cleaning up the balance sheet and diversifying the balance sheet of assets and raw materials were accelerated. Entry into the Marcellus gas game underscores management’s ability to focus on generating the best economic returns … ”Hanold rates NOG as an outperform (i.e. buy), and its target price of $ 15 suggests the stock will be able to do this this year Provides room for 37% growth. (To see Hanold’s track record, click here.) With 4 recent reviews, all purchases, the consensus rating from Strong Buy analysts is unanimous here. Northern’s stock has a price of $ 10.99 and an average target price of $ 14.75, indicating that the stock has upside potential of 34% for a year. (See TipRanks NOG stock analysis.) 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.