When I was a boy of 14, my father was so ignorant I could hardly stand to have the old man around. But when I got to be 21, I was astonished at how much the old man had learned in seven years.”― Mark Twain
No real discernible progress was made on 'Phase 1' of a trade deal between China and the U.S. this week despite many comments that the agreement might be 'near'. Most of the media's attention was focused on impeachment proceedings in Washington which mostly just reminded most of America why they hold D.C. in such contempt.
Despite this, once again most of the major indices hit all-time highs once again this week. All the major indices hit new records and the Dow topped the 28,000 mark for the first time Friday. Retail sales rose .3% in October boosting confidence that the American consumer remains strong even if manufacturing has weakened considerably thanks to slowing global growth and trade tensions.
So which stocks are insiders still buying with equities at elevated levels? Here are three names that caught our eye during the week.
Let's start with Black Knight (BKI). This Florida based midcap concern came public late in 2017 and provides integrated software, data, and analytics solutions to the mortgage and consumer loan, real estate, and capital market verticals. The stock has done well in its just over two years on the market and trades near all-time highs.
On November 8th the equity saw its first insider buying since its debut as its CEO bought just over $1 million in new shares. The company posted a mostly inline third quarter on November 6th that saw revenues rise six percent from the same period a year ago.
Interestingly, the insider buy comes after Compass Point downgraded the stock to Hold after Q3 results and as the stock is close to most analyst price targets which are clustered in the $60s for the most part. As over 30 times FY2019's profits, the stock seems fully valued to me but at least one insider seems to have a more sanguine longer term view on the shares.
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Next up ComScore (SCOR). This information and analytics company that measures audiences, consumer behavior, and advertising across media platforms has had a very rough 2019. The company has had a huge amount of management turnover and its board has been pushing for cost cuts to improve margins as the company has bled losses this year.
The stock recently settled charges with the SEC as well for overstating revenues. Shareholders have been taken to the woodshed as can be seen in the stock chart above. The share do look like they are trying to put in a bottom here. In addition, the stock is seeing its first new insider buying since 2016.
Three insiders including the new CEO added just over $1.2 million in aggregate to their holding via nine transactions from November 7th to November 13th. The company did post lower than expected losses in its third quarter report that came out earlier in the month. The CEO called it a 'transformational quarter' and believes cost cuts and 'rightsizing' will get the company to cash flow breakeven status by the end of the year. Looks like insiders are putting money where their mouths are on righting this ship if nothing else.
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Finally, we have 'Busted IPO' Dropbox (DBX). After scores of selling transactions since it went public late in the first quarter of 2018, we finally have an insider purchase and it is a big one. The CEO of the firm purchased 500,000 shares worth just north of $9.5 million on November 11th.
The company has done a solid job of executing lately, but like most IPOs in this space; expectations were probably too high at its debut. The company posted better than expected third quarter results earlier this month. Revenues grew 19% on a year-over-year basis and free cash flow came in at tad over $100 million for the quarter as well.
Analysts largely liked quarterly results as four analyst firms including Merrill Lynch and Jefferies reiterated Buy ratings. Price targets proffered ranged from $27 to $33. Monness seems to be the lone pessimist as it reissued its Hold rating on Dropbox. It appears the CEO is fully in the 'Bull' camp based on his recent purchase.
And those are two midcap and one small cap name seeing recent and significant insider buying for consideration.
Whoever undertakes to set himself up as a judge of Truth and Knowledge is shipwrecked by the laughter of the gods." - Edmund Burke
Thank You & Happy Hunting,