Insiders Make Million-Dollar Bets on These 2 Stocks - Your Next Profitable Picks?
These two stocks backed by million-dollar insider investments. Is it your turn to ride the wave of potential profits? Dive in now!
Finding the most promising stocks amidst a sea of daily trades is no easy feat for investors. One strategy worth considering is to pay heed to corporate insiders.
These insiders, comprising top-tier executives such as CEOs, CFOs, COOs, and Board Directors, have an intimate understanding of their company's operations. They're also entrusted with delivering profits for shareholders.
Armed with a blend of responsibility and profound knowledge, insiders possess a unique advantage in trading their own company's shares. Their decisions to buy or sell are often informed by a belief in the potential for share value appreciation.
Taking this approach into account, we turn to the Insiders' Hot Stocks tool from TipRanks, which identifies two stocks with recent insider transactions exceeding $1 million. Such significant insider investments serve as a strong indicator for investors to delve deeper. Moreover, both of these stocks have garnered Buy ratings from the Wall Street consensus.
Mobileye Global (MBLY)
Mobileye is a technology firm deeply entrenched in the automotive sector. It specializes in driver assistance and automotive sensor technologies, creating systems that equip drivers with advanced tools to enhance road safety. Their eponymous sensors aid drivers in maintaining a safe distance from other vehicles, road edges, lane markings, and potential hazards. With over 50 original equipment manufacturers and 125 million vehicles worldwide equipped with their technology, Mobileye has established itself as a major player in the industry.
In addition to retrofitting existing vehicles, their sensors can be factory-installed, and they are adaptable to vehicles of all types. What started as a simple idea, using cameras as the linchpin of a life-saving system, has evolved into a successful reality. Mobileye is now making strides in the autonomous vehicle sector, adapting their sensors to provide superior vision for self-driving cars. They offer options for both driver-assist and autonomous vehicles, including front cameras, 360-degree camera coverage, and LiDAR sensors.
Mobileye's financial track record is compelling. Since re-entering the public markets through an IPO last year, the company has consistently reported quarterly earnings between $450 million and $570 million.
In the most recent release for 3Q23, Mobileye's top-line revenue reached $530 million, up nearly 18% year-over-year, surpassing forecasts by over $2 million. Their adjusted diluted EPS, a non-GAAP metric, stood at 22 cents per share, up by 7 cents from the previous year and surpassing estimates by 5 cents.
Looking at insider trades, Board of Directors member Claire McCaskill stands out for her recent substantial purchase. Just this month, she acquired 27,819 shares, investing nearly $1 million. This significant buy strongly boosts insider sentiment and elevates her stake in Mobileye to over $2.9 million.
Deutsche Bank analyst Emmanuel Rosner sees immense potential in Mobileye. He asserts, "We believe MBLY remains the best secular story in the autos group, reflecting the very strong adoption curve potential of SuperVision globally in the next few years..."
Rosner's bullish outlook culminates in a Buy rating and a $50 price target, indicating a 36% upside potential for the next 12 months. The consensus rating for MBLY is Strong Buy, based on 14 analyst reviews, with a 13 to 1 split favoring Buys over Holds.
Fifth Third Bancorp (FITB)
Fifth Third Bancorp, the parent company of Fifth Third Bank, boasts a history dating back to the 1850s. Its name originates from the 1909 merger of Third National Bank and Fifth National Bank. Presently, Fifth Third is a prominent banking entity, with a strong presence across regions east of the Mississippi. It boasts nearly 1,100 branches and over 40,000 fee-free ATMs spanning 11 states, commanding an $18 billion market cap.
The bank offers a comprehensive range of personal, business, and commercial banking products, covering everything from personal checking and savings accounts to insurance policies, business accounts, and commercial checking. They also provide wealth management services and financial planning.
Fifth Third's most recent earnings report, for 3Q23, highlighted substantial figures. The bank reported $121.6 billion in average portfolio loans and leases for the quarter, up 1.7% year-over-year. Average deposits for the same period grew by over 3% to reach $165.6 billion. Net interest income was $1.44 billion, slightly down from $1.5 billion reported in 3Q22. Net income available to common shareholders was $623 million, a 1.3% decrease from the prior year. The company’s diluted earnings per share came in at 91 cents, surpassing expectations by 9 cents.
The earnings comfortably covered the quarterly dividend payment of 35 cents per common share, which translates to an annualized $1.40 per common share and offers investors a generous 5.3% yield, well above current inflation rates.
In terms of insider trading, we observe a significant purchase from C. Bryan Daniels, a member of the company's Board of Directors. Daniels acquired 64,500 shares, investing just over $1.5 million. This purchase brought Daniels' total stake in the company to $8.82 million.
Goldman Sachs analyst Ryan Nash recognizes FITB's favorable prospects. He views the third-quarter performance as solid, with a decent PPNR beat on slightly higher revenues (fees and NII) and lower expenses. He also notes that credit costs came in well below expectations.
Nash believes that while investor positioning may have been somewhat mixed, weighing solid execution against the balance sheet's positioning for lower rates, the results were positive overall. He opines, "We think this was one of the better 3Q print and guides we’ve seen in regionals QTD."
With these positive indicators, Nash supports a Buy rating on FITB. His $32 price target implies a 25% upside potential for the year ahead.
Currently, Fifth Third Bancorp holds a Moderate Buy consensus rating based on 15 recent analyst reviews, with 10 Buys and 5 Holds. The stock is trading at $25.49, and its $30.86 average price target suggests an approximate 21% appreciation in the coming months.
In conclusion, both MBLY and FITB stand as intriguing investment opportunities, with significant insider backing and favorable outlooks from analysts. However, it's important for investors to conduct their own research and consider their individual risk tolerance before making any investment decisions.