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Investors closely monitor insider buys. It’s easy to understand why; if an insider buys, it delivers a positive message to shareholders, indicating that they’re confident in the current state of business.
Still, who is considered an insider?
An insider is defined by Section 16 of the Security Exchange Act as an officer, director, 10% stockholder, or anyone who possesses information because of their relationship with the company.
Many strict rules apply to insiders.
Insiders can’t trade based on material nonpublic information, they must pre-clear all trades, and all transactions of the company’s stock must occur during the Window Period; the Window Period opens on the second trading day following the company’s quarterly or annual earnings release and closes 20 days later.
Further, insiders are prohibited from selling short and trading, writing, or purchasing “put” or “call” options on the company’s stock whether or not such options are traded on an exchange.
Three stocks – Caterpillar (CAT - Free Report) , Enterprise Product Partners (EPD - Free Report) , and United Air Lines (UAL - Free Report) – have seen insider activity in 2022.
Below is a chart illustrating the year-to-date performance of all three stocks, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
Let’s take a closer look at each one.
Caterpillar
Caterpillar is the world’s largest construction-equipment manufacturer. The company designs, develops, engineers, manufactures, markets, and sells machinery, engines, financial products, and insurance to customers.
David MacLennan, a director, has bought a total of 1000 CAT shares throughout 2022.
Analysts have increased their earnings estimates over the last several months, pushing CAT into the highly-coveted Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
Undoubtedly a major positive, Caterpillar is a member of the elite Dividend Aristocrat group. The company’s annual dividend currently yields a solid 2%, with its payout growing nearly 9% over the last five years.
Image Source: Zacks Investment Research
Enterprise Product Partners
Enterprise Products Partners is a partnership that provides services to producers and consumers of commodities, including natural gas, natural gas liquids, oil, and refined petrochemical products.
In December, A.J. Teague, co-CEO, purchased 21,150 EPD shares for roughly $500 thousand.
EPD has consistently posted better-than-expected quarterly results, surpassing top and bottom line estimates in three consecutive quarters. In its latest release, EPD beat earnings expectations by 3.3% and delivered an 11.7% sales surprise.
Image Source: Zacks Investment Research
In addition, EPD’s dividend metrics would please many income-focused investors; the company’s annual dividend currently yields a sizable 8.1%, nicely above its Zacks Oils and Energy sector average.
Image Source: Zacks Investment Research
United Air Lines
United Airlines transports passengers and cargo throughout North America and destinations in Asia, Europe, the Middle East, and Latin America.
Edward Shapiro, a director, purchased 25,000 UAL shares in December for roughly $1 million.
UAL has seen its earnings outlook improve across several timeframes, helping land the stock into a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
The company bounced back in its latest quarter thanks to upbeat travel demand, exceeding the Zacks Consensus EPS Estimate by more than 25% and reporting revenue modestly above expectations.
As we can see in the chart below, UAL’s revenue has recovered nicely from pandemic lows in 2020.
Image Source: Zacks Investment Research
Bottom Line
Simply put, price action in the market throughout 2022 has been less-than-ideal.
Still, insiders of all three companies above – Caterpillar (CAT - Free Report) , Enterprise Product Partners (EPD - Free Report) , and United Air Lines (UAL - Free Report) – have all been busy buying up shares.
Of course, insiders have a longer-term holding horizon than most, a critical aspect that market participants should be aware of.
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3 Stocks Seeing Insider Activity in 2022
Investors closely monitor insider buys. It’s easy to understand why; if an insider buys, it delivers a positive message to shareholders, indicating that they’re confident in the current state of business.
Still, who is considered an insider?
An insider is defined by Section 16 of the Security Exchange Act as an officer, director, 10% stockholder, or anyone who possesses information because of their relationship with the company.
Many strict rules apply to insiders.
Insiders can’t trade based on material nonpublic information, they must pre-clear all trades, and all transactions of the company’s stock must occur during the Window Period; the Window Period opens on the second trading day following the company’s quarterly or annual earnings release and closes 20 days later.
Further, insiders are prohibited from selling short and trading, writing, or purchasing “put” or “call” options on the company’s stock whether or not such options are traded on an exchange.
Three stocks – Caterpillar (CAT - Free Report) , Enterprise Product Partners (EPD - Free Report) , and United Air Lines (UAL - Free Report) – have seen insider activity in 2022.
Below is a chart illustrating the year-to-date performance of all three stocks, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
Let’s take a closer look at each one.
Caterpillar
Caterpillar is the world’s largest construction-equipment manufacturer. The company designs, develops, engineers, manufactures, markets, and sells machinery, engines, financial products, and insurance to customers.
David MacLennan, a director, has bought a total of 1000 CAT shares throughout 2022.
Analysts have increased their earnings estimates over the last several months, pushing CAT into the highly-coveted Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
Undoubtedly a major positive, Caterpillar is a member of the elite Dividend Aristocrat group. The company’s annual dividend currently yields a solid 2%, with its payout growing nearly 9% over the last five years.
Image Source: Zacks Investment Research
Enterprise Product Partners
Enterprise Products Partners is a partnership that provides services to producers and consumers of commodities, including natural gas, natural gas liquids, oil, and refined petrochemical products.
In December, A.J. Teague, co-CEO, purchased 21,150 EPD shares for roughly $500 thousand.
EPD has consistently posted better-than-expected quarterly results, surpassing top and bottom line estimates in three consecutive quarters. In its latest release, EPD beat earnings expectations by 3.3% and delivered an 11.7% sales surprise.
Image Source: Zacks Investment Research
In addition, EPD’s dividend metrics would please many income-focused investors; the company’s annual dividend currently yields a sizable 8.1%, nicely above its Zacks Oils and Energy sector average.
Image Source: Zacks Investment Research
United Air Lines
United Airlines transports passengers and cargo throughout North America and destinations in Asia, Europe, the Middle East, and Latin America.
Edward Shapiro, a director, purchased 25,000 UAL shares in December for roughly $1 million.
UAL has seen its earnings outlook improve across several timeframes, helping land the stock into a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
The company bounced back in its latest quarter thanks to upbeat travel demand, exceeding the Zacks Consensus EPS Estimate by more than 25% and reporting revenue modestly above expectations.
As we can see in the chart below, UAL’s revenue has recovered nicely from pandemic lows in 2020.
Image Source: Zacks Investment Research
Bottom Line
Simply put, price action in the market throughout 2022 has been less-than-ideal.
Still, insiders of all three companies above – Caterpillar (CAT - Free Report) , Enterprise Product Partners (EPD - Free Report) , and United Air Lines (UAL - Free Report) – have all been busy buying up shares.
Of course, insiders have a longer-term holding horizon than most, a critical aspect that market participants should be aware of.