(List compiled by Andrew Dominguez. Data sourced from Finviz and Yahoo! Finance.)
Earnings season can be an exciting period for investors. This week alone, over 700 companies with market caps over $300M are releasing their data for the previous quarter.
In the days leading up to a major earnings release, thousands of analysts are busy estimating how well or poorly a company performed over the quarter, including important earnings per share estimates that are key figures in valuing a company.
If a company beats analysts’ estimates, share prices could immediately jump. If they fall short, on the other hand, markets could punish the stock. The whole endeavour sometimes seems like a guessing game reminiscent of “The Price is Right.”
Earnings calls are also sometimes used for new product announcements and for general question and answer sessions for a company’s management. At Apple’s earnings call last week, for example, the company’s executives announced the release of its latest software, which happened to be the day after the earnings call.
In anticipation of this week’s earnings calls, we compiled a list of companies with earnings calls this week and with market caps over $2 billion that have seen significant insider buying over the last six months.
The reason we choose to list companies experiencing insider buying is that insiders work for the company in question and their investment activity is closely monitored. Insiders usually have access to more information than other investors, and their investment activity in the company can tell us a lot about where they feel the business is heading. Companies experiencing insider buying over the past six months provide an indicator that insiders think the stock is undervalued at current levels.
Insider buying is represented as a percentage of the share float.
Note: insiders trade shares for many reasons, not just expected price movements. Additionally, because insiders might work for a company for many years, and because they must file a lot of paperwork before they can trade shares, their investment timeline could be much longer than yours.
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List sorted according to net shares purchased by insiders as a percentage of the share float.
1. Theravance Inc. (THRX): Biotechnology industry with a market cap of $2.09B. Over the last six months, insiders have purchased 5,189,200 shares (net), which represents 9.92% of the 52.32M share float.
2. Motorola Solutions, Inc. (MSI): Communication Equipment industry with a market cap of $15.2B. Over the last six months, insiders have purchased 17,600,969 shares (net), which represents 6.38% of the 275.84M share float.
3. Everest Re Group Ltd. (RE): Property & Casualty Insurance industry with a market cap of $4.42B. Over the last six months, insiders have purchased 1,250,180 shares (net), which represents 2.84% of the 43.99M share float.
4. Six Flags Entertainment Corp. (SIX): General Entertainment industry with a market cap of $3.47B. Over the last six months, insiders have purchased 481,660 shares (net), which represents 1.57% of the 30.61M share float.
5. Regeneron Pharmaceuticals, Inc. (REGN): Biotechnology industry with a market cap of $5.22B. Over the last six months, insiders have purchased 675,375 shares (net), which represents 0.96% of the 70.43M share float.
6. Republic Services, Inc. (RSG): Waste Management industry with a market cap of $11.48B. Over the last six months, insiders have purchased 1,732,695 shares (net), which represents 0.54% of the 320.77M share float.
Interactive Chart: Press Play to see how analyst ratings have changed for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.