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Insiders Are Jumping Into These 3 Stocks

Investors closely monitor insider buys.

It’s easy to understand why; if an insider buys, it can deliver a positive message to shareholders, indicating that they’re confident in the long-term picture of the business.

But who are insiders?

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.

Many strict rules apply to insiders.

Insiders can’t trade based on material nonpublic information, they must pre-clear all trades, and all transactions of the company’s stock must occur during the Window Period.

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In addition, insiders have a longer holding period than most, a critical aspect that investors should be aware of.

Three companies – Deere & Co. DE, HEICO HEI, and Genuine Parts GPC – have all seen recent insider activity. For those interested in trading like the insiders, let’s take a closer look at each.

Deere & Co.

Illinois-based Deere is the world’s largest producer of agricultural equipment, manufacturing agricultural machinery since 1837 under its iconic John Deere brand and signature green and yellow color scheme. Tami Erwin, a Director, recently purchased roughly $250 thousand of Deere shares.

For those that seek income, Deere has that covered; the company’s annual dividend yields 1.3% with a sustainable payout ratio sitting at 17% of its earnings. Impressively, Deere’s payout has grown by more than 13% just over the last five years.

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Zacks Investment Research


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Shares are cheap on a relative basis, with the current 11.9X forward earnings multiple sitting well below the 16.2X five-year median and the Zacks Industrial Products sector average. Shares carry a Style Score of “B” for Value.

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Zacks Investment Research


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HEICO

HEICO is one of the world's leading manufacturers of Federal Aviation Administration-approved jet engine and aircraft component replacement parts. Lauren Mendelson, CEO, recently purchased roughly $40 thousand in shares.

The company posted results that came in above expectations in its latest release, exceeding the Zacks Consensus EPS Estimate by nearly 6%. Quarterly revenue totaled $687 million, 5% above expectations and improving 30% from the year-ago period.

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Zacks Investment Research


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HEICO carries an impressive growth profile, with earnings forecasted to climb 15% in its current fiscal year on 22% higher revenues. The growth continues in FY24, with estimates calling for a further 15% improvement in earnings and a 7.7% revenue uptick.

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Zacks Investment Research


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Genuine Parts

Genuine Parts, a Zacks Rank #2 (Buy), distributes automotive and industrial replacement parts and materials. A Director purchased roughly $375 thousand of GPC shares, reported earlier in June.

The company has seen positive earnings estimate revisions, with the trend particularly noteworthy for its current fiscal year.

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Zacks Investment Research


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In addition, the company’s 32.5% trailing twelve-month return on equity is worth highlighting, reflecting higher efficiency in generating profits from existing assets relative to peers.

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Zacks Investment Research


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Bottom Line

Many investors closely monitor insider buys, as they can provide a high level of confidence. After all, if an insider didn’t believe in the company’s future pathway, why would they buy?

And all three stocks above – Deere & Co. DE, HEICO HEI, and Genuine Parts GPC – have seen recent insider activity.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Genuine Parts Company (GPC) : Free Stock Analysis Report

Deere & Company (DE) : Free Stock Analysis Report

Heico Corporation (HEI) : Free Stock Analysis Report

To read this article on Zacks.com click here.

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