Three major headwinds have combined to hit the market — persistently high inflation, the Fed raising interest rates in the ongoing battle to tame it, and growing fears that a recession is looming.
In such an unpredictable market environment, investors need to find some clear and reliable cues to indicate which stocks are the most attractive options for weathering volatile conditions. One of the clearest such signals comes from inside the company, company officials in high positions – CEOs, CFOs, members of the Board of Directors – whose positions provide them with Get an inside look at a company’s performance, along with more detailed knowledge to make predictions about their own stock. .
As humans, like the rest of us, these insiders use that knowledge as they trade their own stocks – and to maintain a level playing field, regulators love require them to disclose their internal transactions in a timely manner. And when insiders start buying their shares in the millions of dollars, investors can keep an eye on that and make data-driven decisions.
Use Hot stocks of insiders Tools from TipRanks, we found two stocks that are showing such large insider purchases – informative purchases in the millions of dollars. We can drill down into the data and analyst comments to get a clearer picture of why they’re uploading right now.
Masimo Corporation (MASI)
The first is Masimo Corporation, a healthcare company that designs, manufactures and markets non-invasive medical monitoring technologies, with a line of devices for home monitoring and hospital automation. The company’s core products focus on pulse oximetry, the non-invasive monitoring of a patient’s blood oxygen saturation level. Masimo is based in Irvine, California, and Masimo SET (signal extraction technology) helps monitor more than 200 million patients worldwide.
Masimo’s stock has fallen this year, about 51%, but so far most of that loss has come in February, when it was reported the company spent more than $1 billion acquiring Sound United, a non-healthcare company focused on audio technology. Investors have been skeptical of the move, which does not appear to be in line with Masimo’s tech track.
Since that announcement and the stock price drop, the stock has been pretty stable — and the company has hit sales and earnings. In its last quarter report, 3Q22, the company posted peak revenue of $549 million, an impressive 78% year-over-year increase. This includes healthcare revenue of $372 million and non-healthcare revenue of $222 million. Non-GAAP net income, of $53.9 million, converted to $1 per diluted share, up 6.3% year-over-year. Both gross revenue and diluted EPS beat expectations.
On the product front, Masimo recently released the W1 Watch, a personal fitness watch that keeps continuous records of vital health data. W1 is billed as the first comfortable and convenient wearable personal health monitor in its segment, adjustable for use by healthcare professionals to monitor patients or individual consumers. health conscious individuals.
The company also unveiled the Stork child-monitoring system, which ties in with the home theater and sound systems to give parents easy monitoring anywhere in the home – and to stay connected. Masimo products with Sound United purchased earlier this year.
Turn to the insider, we see that company CEO Joe Kiani has bought a lot of MASI stock. Last month, he bought 39,778 shares for $4.97 million; he followed that up with last week’s purchase of another 7,040 shares, for which he paid close to $1.02 million. Kiani currently holds a stake in the company worth $517.61 million.
After initially having some apprehension surrounding the acquisition of Sound United, BTIG, analyst Marie Thibault appeared and was optimistic about the potential of the company’s products.
“We think the W1 watch makes sense as part of a remote monitoring ecosystem, and Sound United products help complete that home care environment,” she wrote. The Stork Baby Monitor seemed a natural fit, given MASI’s reputation in the pulse field, doctors’ familiarity with the brand, and parental preference for a safe product. full, medical grade. With Stork, Sound United’s consumer retail channels will be an important driver of entry into the market. In our view, the revenue contribution from new consumer healthcare products (one point of revenue CAGR for 2023-2028) is conservatively placed.”
With this stance, Thibault rates the stock as Buy, with a $180 price target suggesting a one-year upside potential of 21%. (To see Thibault’s achievements, click here.)
There are 5 recent analyst reviews of this stock and they give this stock a 4 to 1 ratio of Buy over Hold for the Strong Buy consensus rating. The shares are priced at $148.09 and have an average price target of $166.40, implying a 12% gain over a one-year term. (See Masimo’s stock forecast at TipRanks.)
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Victory Capital Group (VTR)
Next is Victory Capital, the parent company in investment and wealth management, which operates through a network of subsidiaries. Victory provides a full range of services to its clients, including investment advice, fund management and general wealth management. Overall, Victory has a total AUM of around $161.5 billion as of November 30. This is up from the Q3 total of $147.3 billion.
Last month, Victory reported third-quarter results for 2022. Top and bottom profits were both down slightly year-over-year, but both came in above estimates. Revenue was reported at $207.3 million, compared with $226.3 million in the previous quarter, while adjusted earnings, at $1.19 per diluted share, down from $1. $.25 reported for the third quarter of 2011. However, EPS was significantly higher than the forecast of $1.07, 11% higher.
Although revenue and earnings fell year-over-year, the company’s Board of Directors felt confident enough to authorize a common stock dividend of 25 cents. This marks the fourth consecutive quarter with a dividend at this rate, and the $1 annual payment delivers an above-average yield of 3.7%. The company has gradually increased its dividend payout over the past 3 years.
win big internal purchase comes from the company’s President and CEO David Craig Brown, who bought 60,000 shares last week. These are now worth more than $1.63 million and have raised his holdings in the company to over $60 million.
Brown isn’t the only bull here; Kenneth Lee, a 5-star analyst at RBC Capital, is also bullish on Victory’s outlook. After the Q3 report, he wrote, “We remain impressed that VCTR continues to demonstrate margin resilience, during a challenging quarter with significant market volatility. VCTR’s adjusted EBITDA margin was 50.0% for the quarter, higher than our estimate of 48.8%. Recall, management’s long-term EBITDA rate of return guidance is 49%, including the potential impact from ongoing reinvestments (VCTR continues to build its digital capabilities). , especially in the business of direct investors). We note that VCTR’s operating model, with around two-thirds of its variable operating expenses, allows the company to be flexible with costs during market downturns.”
Looking ahead to the stock, Lee sees reason for a Better rating (Buy), while his price target, at $34, indicates confidence in the possibility of a 25% upside over the next 12 months. . (To see Lee’s achievements, click here.)
This asset manager received a Buy Moderate consensus rating from Street analysts, based on 9 recent analyst reviews – including 5 Buy, 2 Hold and 2 Sell. With the stock priced at $27.20 and an average price target of $30.56, the stock has a 12% upside potential by the end of next year. (View Victory stock forecast at TipRanks.)
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Disclaimer: The opinions expressed in this article are those of prominent analysts only. Content is used for informational purposes only. It is very important that you do your own analysis before making any investment.
