Investors are constantly on the lookout for new opportunities. There are different ways to unearth a gem – from keeping a tab on the pros’ recommendations to watching technical indicators to tracking hedge fund activity. Another option is to follow in the footsteps of the corporate insiders.
These are the company directors and officers whose positions give them greater depth and detail of knowledge about their own company. And better, the insiders are also responsible for company performance and share appreciation. The combination of knowledge and accountability makes insider trades uniquely informative for investors.
TipRanks follows these trades, offering investors the Insiders’ Hot Stocks tool to ease the process. Investors can follow stocks, or insider trading strategies, to find the right choices for their own portfolios. Using this valuable information, we’ve pulled the stats on two stocks that have shown solid recent insider buys.
We’ll start with Harley-Davidson, one of the most recognizable brand names in the world, tied forever to the motorcycle segment of the auto industry.
Harleys, being motorcycles, tend to see seasonal effects on sales and earnings, and that was visible even during the ‘corona year’ of 2020. The second quarter showed steep losses instead of the usual profits – an effect of the pandemic and its economic distortions – but the third quarter returned to profitability. The Q4 results, recently reported, covered colder months and again showed a loss.
Turning to the insider trades on HOG, we find a million-dollar purchase by company President and CEO Jochen Zeitz. Zeitz bought a bloc of 30,800 shares with that transaction, conducted just days after the disappointing earnings report.
Wedbush analyst James Hardiman sees a path forward for Harley, and is confident that the company can navigate its way out of its current difficulties.
“While still down slightly, our January checks showed sequential improvement, lending credence to the notion that the 2020 weakness was primarily a function of a lack of available inventory; opening the door to some retail growth once dealers get a full allotment of new models. Following an improved inventory position, a narrowed price gap between new and used motorcycles, and a restructuring of the cost structure, better retail sales represent the missing link to the turnaround story,” Hardiman noted.
To this end, Hardiman rates HOG an Outperform (i.e. Buy), and his $42 price target indicates it has room for ~15% upside in the coming year. (To watch Hardiman’s track record, click here)
Overall, there are 10 recent reviews on Harley-Davidson, and they are evenly split – 5 Buys, and 5 Holds. This gives the stock a Moderate Buy analyst consensus rating. Meanwhile, HOG shares are trading at $36.40 and their $38.67 average price target implies an upside of 6% from that level. (See HOG stock analysis on TipRanks)
Enterprise Financial Services (EFSC)
Next up, Enterprise Financial Services, is a holding company whose subsidiary, Enterprise Bank and Trust, offers services for customers in California, Nevada, Arizona, New Mexico, Kansas, and Missouri. The company operates a network of 39 branches, and services include a full range of wealth management, including financial planning, estate planning, and investment management. Services are offered to both individuals and institutions.
Enterprise is a small-cap company, with a market cap of $1.25 billion and over $359 million in annual revenue. The company saw 4Q20 revenues grow 12% year-over-year, reversing losses taken in the corona pandemic. EPS, at $1, was down 8% compared to the year-ago quarter, but up 44% sequentially.
On the insider front, John Eulich, a Board member of Enterprise, made the recent insider buy here. He spent $273,525 to pick up a bloc of 7,500 shares.
Analyst David Long, of Raymond James, sees reason for a bullish outlook here, noting: “Credit continued to improve and the bank remains well-prepared to deal with any losses with reserves over 2%. Net, we continue to view EFSC as a highly profitable, emerging Midwest regional bank with a well-diversified operating footprint and model that should continue to deliver solid credit metrics and superior profitability, regardless of the backdrop.”
Long rates EFSC an Outperform (i.e. Buy), and gives the stock a $45 price target, suggesting an upside potential of 12% in the year ahead. (To watch Long’s track record, click here)
Overall, EFSC shares get a unanimous thumbs up from the analyst consensus, with 3 recent Buy reviews adding up to a Strong Buy rating. The stock is priced at $40.02, while the $43.67 average price target indicates room for a 9% growth on the upside. (See EFSC stock analysis on TipRanks)
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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.