Fintel’s Officer Sentiment quant model identifies companies that experienced significant officer buying activity in the last year.
There is significant academic research that suggests corporate insiders outperform the market when buying shares in their own companies.
Fintel believes there are three metrics included in this quant model:
- There are open market purchases made by corporate officers that are directly involved in the daily business operations.
- Fintel also looks at the total dollar amounts spent to buy the shares.
- The final metric is the average purchase price of shares bought. If the current share price is below the average purchase price (meaning their trades are at a loss), then the officers will be highly motivated to recoup those losses.
The top 10 stocks with the highest insider sentiment score have been highlighted in this article with a brief overview of recent developments.
HGEN / Humanigen Inc has the tenth highest score on the officer sentiment leaderboard with a score of 95.68. The clinical-stage ‘cytokine storm’ focused biopharma has seen its share price fall more than -94% over the last year after the company announced in early July that trial results for the lenzilumab candidate did not meet its primary endpoint.
HGEN now only has a market cap of $18.4 million but has recently attracted investor buying activity after disclosing a settlement agreement with Catalent Pharma solutions.
Four insiders of Humanigen bought $5.42 million worth of shares at an average price of $2.57 each during the year. At current share price levels, these officers have -93.1% in losses on the purchase of those shares. The officers will be inclined to reignite share price momentum with a new shift in strategy for the year ahead.
BODY / The Beachbody Company is ninth on the leaderboard with a score of 95.94. The American fitness and media company sank a further -64.5% over 2022 after experiencing a weakening share price since listing via a SPAC merger in Feb 2021 at $10.
BODY currently has a $200 million market cap and is forecasting to generate around $700 million in revenue. Investors remain concerned around the firm’s ability to turn a profit as the stock continues to report losses.
Company officers remain more confident on the outlook with four officers buying $6.39 million worth of shares at an average price of $1.44 each. These officers have -52.2% in losses based on the current share price. The insiders included the group’s CEO and COO.
EVA / Enviva Partners LP is eighth on the list with an officer score of 96.24. The worlds largest wood pellet producers share price has declined -35.6% over the last year but remains above pre-pandemic levels. EVA currently has a $3.2 billion market cap and a 7.5% dividend yield.
Selling pressure was fuelled in early October by a short attack from Blue Orca Capital. Since the release of this report, six net company officers of Enviva bought $2.92 million worth of shares at an average price of $55.91 each. The officers are down about -8.5% on average for the trades.
IE / Ivanhoe Electric Inc is seventh on the leaderboard with an officer score of 96.41. The minerals exploration company has experienced 28.5% share price growth over the last year, bumping its market cap to $1.3 billion.
The stock was boosted higher in early December when the company announced its subsidiary signed milestone agreements with JCHX Mining to develop the Colombian based Alacran project.
Four officers of Ivanhoe Electric bought $9.11 million worth of shares last year with a cost of $8.88 each. The officers have made a gain of 64.2% from this cost price. Most recently Ivanhoe’s Chairman purchased 422,767 new shares at $9.85 each on the 29th of November.
HLMN / Hillman Solutions Corp is sixth on the officer sentiment leaderboard with a score of 96.63. The hardware solutions provider has experienced a flat share price turn over the last year after rising more than 30% above and 20% below the year’s starting point.
The company generates healthy profits from strong cash flows and currently expects to report a sales figure of around $1.5 billion for the 2022 year. The company has a competitive moat of operations but has not been exempt from margin deterioration this year from rising cost inflation.
Six company officers including the CEO and CFO purchased a total of $3.78 million worth of shares during 2022. The officers have a minor -3.4% capital loss based on the most recent closing price.
PLAY / Dave & Buster’s Entertainment Inc is fifth on the officer sentiment leaderboard with a score of 97.60. The American restaurant and entertainment business’s share price has strengthened by +15.3% over the last year.
The company reported Q3 results in December, beating consensus revenue and profit forecasts. Comparative sales grew over the year with both segments reporting sales ahead of forecasts.
A whopping 9 company officers have bought a total of $3.86 million worth of shares at an average price of $34.58 each. The officers have played their cards right and have profited 24.3% based on the average purchase price. The officers that bought stock included the groups CMO, CTO, and CFO. COO and CPO..
BRP / BRP Group is fourth on the leaderboard with an officer sentiment score of 97.60. Over the last year, the insurance group’s share price has increased by 1.4%. The stock initially listed in October 2019 with a $14 listing price and has more than doubled since.
During the group’s most recent result in November, management highlighted that the company continued to experience more than double-digit organic growth across its platform.
Six company officers purchased $6.47 million worth of shares over the last year at an average price of $27.47 each. The insiders have profited 15.2% since purchasing the stock and probably think the company has more growth left in the tank.
RILY / B. Riley Financial Inc ranks in the third spot with an officer score of 96.73. The financial services company’s stock price declined -42.2% over the last year but it remains well above pre-pandemic levels.
At the end of December, the firm provided updated fourth quarter guidance, telling investors it intends to report a full year adjusted EBITDA figure between $355 to $365 million. Management expects the firm will end the year with cash and liquid investment of $2.15 billion and debt of $2.5 billion.
Four company officers bought $41.68 million worth of stock over the year at an average price of $47.17. The officers are currently down -14.91% on average.
EE / Excelerate Energy Inc ranks in second place with a 98.16 officer score. Excelerate’s shares have traded broadly flat since listing at $24 per share in April of 2022. The company is a supplier of liquid natural gas energy solutions and is on track to report that it generated positive adjusted EBITDA of $264 to $274 million for the 2022 year.
Six of Excelerate’s officers bought shares in the company during the last year worth $10 million in total. All of the officers bought the stock at $24 each as part of the firm’s IPO and have a gain of 2%.
CVNA / Carvana Co holds the top spot on the leaderboard with the highest officer sentiment score of 98.90. The online used car dealer’s shares are down -95% over the last year, leaving the company with a $1.38 billion market cap valuation. Carvana was the fastest growing online used car dealer in the United States.
The company continues to generate losses and is experiencing declines in vehicle sales over the year which continues to pressure the share price.
Five company officers have purchased $167.09 million worth of CVNA shares over the last year with an average purchase price of $69.25. The officers have -89.86% of capital losses from this cost base.
Several purchases occurred during November with prices ranging from $6.86 up to $11.13.
The officers that bought stock included Chief Product Officer Daniel Gill, President of Special Projects Tom Taria and Board Directors Greg Sullivan, Ira Platt and Michael Maroone.
This article originally appeared on Fintel
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