TipRanks
Corporate Insiders Pull the Trigger on These 3 Stocks
Follow the leader is a viable strategy in stock investing, as long as you find the right leader to follow. Corporate insiders, of course, are by their nature leaders. They are the company officers who run the show, and the nature of their position, or positions, puts them in position to access knowledge, even foreknowledge, that the ordinary investors simply doesn’t have. This is a case where regulators have done the right thing. Insiders can make their trades – but they have to make them public. The investing public must be able to see what company officers are doing with the stock. And because these officers are not in it solely to make money for themselves, but are responsible to Boards of Directors, stock owners, and other stake holders, they usually don’t start buying their own stock without good reason.Fortunately, the TipRanks’ Insiders’ Hot Stocks page provides the scoop on which stocks the market’s insiders are buying – or selling – so that you can make informed purchases. We’ve picked three stocks with recent informative buys to show how the data works for you.HBT Financial (HBT)First on today’s list is HBT Financial, a bank holding company with two subsidiaries operating in the State of Illinois. HBT owns Heartland Bank and Trust and State Bank of Lincoln. The company has a 100-year history in Central Illinois, offering a variety of banking services which today include credit cards, insurance loans, money transfer, wealth management, and other retail and commercial banking products. HBT boasts 63 branches in the state, along with $3.5 billion in total assets, $3 billion in total deposits, and $2.3 billion in total loan accounts.Retail banking was hurt by the corona crisis when the lockdown policies kept customers out of the branches. Earnings and revenues slipped in Q1 – although they remained flat in Q2, and the forecast for Q3 is a modest rise.While HBT is down 34% year-to-date, it seems that insiders are willing to buy the shares on the dip.Chairman and CEO Fred Drake has bought two blocs of 20,000 shares each this month, putting down a total of $485,000 for the stock. Several other corporate offices have made significant buys in the past two weeks, but Drake’s were bigger by far. Covering this stock on Wall Street is Daniel Tamayo, from Raymond James. Tamayo believes that HBT is in a good position, and writes, “…better-than-expected fee income due to a strong mortgage banking environment improved the overall revenue outlook and drove our PTPPI forecasts higher. Finally, deferrals have come down to <5% and are still dropping while reserves should be near a peak. Net, our bullish thesis remains intact that strong underwriting standards and capital levels justify a premium P/BTV multiple to peers for HBT shares.”In line with these sentiments, Tamayo rates the stock as Outperform (i.e. Buy), and his $16 price target implies an upside of 33% for the coming year. (To watch Tamayo’s track record, click here)Tamayo’s is one of two reviews on this stock. The other gives a Hold, making the analyst consensus rating a Moderate Buy. The $15.50 average price target suggests that there is room for 29% growth from the trading price of $12.10. (See HBT stock analysis on TipRanks)OFG Bancorp (OFG)The next stock on our list is another bank holding company. OFG has three subsidiaries, providing services in Puerto Rico and the US Virgin Islands. The company boasts $9.3 billion in assets, and offers a range of consumer and commercial banking services, including consumer finance, auto loans, residential and commercial mortgages, business loans, and international trade financing. In addition, OFG offers wealth management for high-net-worth clients.The company’s stock fell sharply in the market collapse of February/March, and never really recovered. After a period of volatility, the shares have been trading flat since mid-June, and still down 44% year-to-dateDespite the low share value, OFG showed positive quarterly results in 1H20. Revenues grew from Q4 to Q1, and while they slipped in Q2, that top line remained well above last year’s levels. EPS for the second quarter came in at 39 cents, 56% better than forecast. The solid top and bottom lines have allowed OFG to maintain its dividend during ‘corona,’ at 7 cents per common share. The dividend yields 2.1%, in line with the average among S&P-listed companies.The insider sentiment here is strongly positive after buys by two officers: Jose Fernandez, CEO, and Ganesh Kumar, COO. Fernandez this month bought two sets of shares, 25,152 in all, for a total of $323,960. Kumar picked up 10,096 shares, also in two tranches, paying out $123,754 for the blocs. Alexander Twerdahl, writing from Piper Sandler, believes that OFG is on solid footing. He writes, “We think that OFG is set up well for long-term success. The bank has experience with crises from Hurricane Maria, and that experience gives us added confidence on the credit outcome. Furthermore, PR is positioned well in terms of its allocation of federal and local stimulus programs.”Looking into specifics, Twerdahl adds, “Loan production numbers were stronger than we expected, but consumer, auto, and mortgage were still negatively impacted by the pandemic. Deposit balances shot up, with non-brokered deposits up 10% sequentially, clearly aided by stimulus programs.”Based on these comments, Twerdahl gives OFG shares an Overweight (i.e. Buy) rating, its only review in recent weeks. His price target of $16.50 suggests the stock has a 26% upside potential in the next 12 months. (See OFG stock analysis on TipRanks)Cigna Corporation (CI)The last stock on our list is a member of the S&P 500 index. Cigna is also a major health services organization, providing to both Medicare and Medicaid, and offering health, medical, dental, disability, life, and accident insurance products through its subsidiaries. Most of Cigna’s plans are administered by governmental entities and non-governmental organizations. In recent years, Cigna has also moved into the Pharmacy Benefits Management market.Last year, Cigna saw total revenues of $153.6 billion. Entering 2020, the company’s quarterly revenue stayed stable, at $38 billion, and rose to $39 billion in Q2. EPS grew sequentially in the first half of the year, to $4.69 in Q1 and $5.81 in Q2. Strong gains in the Health and Integrated Medical segments lay behind the solid quarterly results.On the insider front there is only one recent trade, but it is ‘informative.’ Exec VP and CFO Eric Palmer bought 1,000 shares for over $168K. His move swung the needle on insider sentiment into positive territory.5-star RBC Capital analyst Frank Morgan likes Cigna stock. The analyst puts a $270 price target on CI, indicating a robust potential upside of 60% and supporting his Buy rating on the shares. (To watch Morgan’s track record, click here)“Amid the pandemic that is lifting all MCOS’ results in the near term, CI continues to see a differentiated performance from its PBM, gaining momentum in the integrated model, and surprising resilience in the Commercial business… Additionally, cash flow remains very strong, with mgmt’s deleverage target in sight and further buybacks likely,” Morgan wrote.Overall, CI’s Strong Buy analyst consensus rating is based on 5 reviews, including 4 Buys and 1 Sell. CI shares have an average price target of $247.60, suggesting a one-year upside of 46% for this blue-chip stock. (See CI stock analysis on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
Add Comment