These 3 Buy-Rated Stocks Have Seen Recent Insider Activity
Insider action is closely monitored among investors. After all, it’s easy to understand why these transactions receive so much attention, as it’s a confidence booster for investors when an insider swoops in for a buy.
But who is considered an insider?
An insider is defined by Section 16 of the Security Exchange Act as an officer, director, 10% stockholder, or anyone who possesses information because of their relationship with the company. Of course, many strict rules apply.
As of late, three stocks – Lennar LEN, Super Micro Computer SMCI, and NextEra Energy NEE – have all seen insider activity. In addition, all three sport a favorable Zacks Rank, indicating rising earnings estimate revisions.
Let’s take a closer look at each.
Super Micro Computer
A director within SMCI recently purchased 4,000 shares at a total transaction value of roughly $1.1 million. Analysts have raised their expectations across the board for the company, helping land it into a Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
SMCI shares don’t appear valuation stretched given the company’s robust growth profile, with the current 16.2X forward earnings multiple sitting nicely below its 2023 high of 39.5X amid the recent pullback in shares. Earnings are forecasted to climb 31% and 15% in FY24 and FY25, respectively.
The company posted better-than-expected results in its latest release, exceeding the Zacks Consensus EPS Estimate by 3% and reporting revenue modestly ahead of the consensus. Earnings saw year-over-year growth of 33%, whereas revenue improved 34% from the year-ago period.
As shown below, the company has enjoyed a growth acceleration within the top line. However, the market wasn’t impressed with the recent quarterly results, with SMCI shares facing selling pressure post-earnings and likely reflecting profit-taking.
Image Source: Zacks Investment Research
NextEra Energy
A director of NEE recently made a splash, acquiring 10,000 shares at a price tag of roughly $680k. The stock presently sports a Zacks Rank #2 (Buy).
For those who prefer income, NEE shares have that covered; shares currently yield a solid 2.8% annually. The company has committed to increasingly rewarding its shareholders, carrying an 11% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
In addition, NextEra Energy’s growth is forecasted to remain stable, with Zacks Consensus Estimates suggesting 7% higher earnings paired with a 30% revenue bump in its current year. Peeking ahead to FY24, earnings and revenue are forecasted to see improvements of 9% and 8%, respectively.
Image Source: Zacks Investment Research
Lennar
A director of Lennar recently purchased 820 LEN shares at a price tag of roughly $100k. The company has enjoyed positive earnings estimate revisions across the board, helping land the stock into a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
The company’s shares have been boosted in 2023 following quarterly results, as we can see illustrated below. Just in its latest release, the homebuilder exceeded earnings expectations by more than 25% and reported revenue 10% ahead of expectations.
Image Source: Zacks Investment Research
Bottom Line
Investors closely follow insider transactions. After all, if an insider is buying, it sends a positive message to shareholders, whereas selling could convey negative sentiment in certain circumstances.
Insiders of all three companies above – Lennar LEN, Super Micro Computer SMCI, and NextEra Energy NEE – have recently made splashes.
Importantly, insiders have a longer-term holding horizon than most, a critical aspect that market participants should be aware of.
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NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
Lennar Corporation (LEN) : Free Stock Analysis Report
Super Micro Computer, Inc. (SMCI) : Free Stock Analysis Report
