After a challenging start to 2022, a somewhat clearer economic outlook has lifted stocks as of late. Buyers have finally returned after seemingly being nowhere to be found.
However, they weren’t entirely gone.
Throughout the year, there have been several notable insider buys within several tech titans, including Netflix (NFLX - Free Report) , Adobe (ADBE - Free Report) , and Oracle (ORCL - Free Report) .
The chart below illustrates the year-to-date share performance of all three companies.
Insider buys are widely followed by investors as they’re generally a good indicator of the company’s current health. After all, if an insider is selling, why would an investor want to buy?
Let’s take a closer look at each company's forecasted growth rates to get a clearer view of what enticed the insiders.
Netflix
We’re all familiar with Netflix (NFLX - Free Report) , the titan that has taken the digital streaming industry to the next level. Earlier in the year, an Officer purchased approximately 51,000 NFLX shares at a price of around $385 per share.
It’s undoubtedly been a rough stretch for Netflix shares in 2022, down more than 60%. A slowdown in subscriber growth has been a primary driving force behind the poor share performance. However, the company has chained together four consecutive bottom-line beats.
Netflix’s bottom-line is forecasted to decrease by nearly 11% in FY22, but growth is projected to pick back up in FY23, with the Zacks Consensus EPS Estimate of $10.06 reflecting a solid 9% uptick in earnings year-over-year.
The company’s top-line appears to be in much better shape - for FY22, NFLX is forecasted to generate $31.7 billion in revenue, a 6.6% increase when compared to FY21 sales of $29.7 billion. In addition, the top-line is projected to tack on an additional 7.3% in FY23.
Following the sell-off, Netflix shares trade at much more reasonable valuation levels. The company’s 22.4X forward earnings multiple is a fraction of its five-year median of 82.1X. Shares now trade at a 19% premium relative to the S&P 500.
Adobe
Adobe (ADBE - Free Report) is one of the biggest software companies in the world, generating the bulk of its revenue via licensing fees from its customers. In January, an Adobe Director purchased approximately 1,000 ADBE shares at a price of roughly $515 per share.
Software stocks have tumbled in 2022, and ADBE has been no exception – shares are down more than 25% year-to-date. However, the company has continued to report bottom-line results above expectations, exceeding the Zacks Consensus EPS Estimate in 14 consecutive quarters.
In addition, growth estimates for both the top and bottom-lines are rock-solid. For the current fiscal year (FY22), Adobe’s bottom-line is projected to register a solid 8.3% uptick year-over-year. And in FY23, earnings are forecasted to grow an additional 16%.
Adobe’s top-line is also in remarkable shape; annual revenue is forecasted to climb to $17.7 billion in FY22, a notable 12% uptick year-over-year. Even more impressive, the FY23 annual sales estimate of $20.1 billion reflects another double-digit increase in revenue of 14% year-over-year.
Adobe’s valuation levels are elevated but are low relative to where shares have traded in the past. Its 37.3X forward P/E ratio is nowhere near its five-year median of 45.6X and highs of 66.3X in 2020.
Shares trade at a 99% premium relative to the S&P 500.
Oracle
Oracle (ORCL - Free Report) is an American multinational computer technology corporation selling database software and technology, cloud-engineered systems, and enterprise software products. Around the beginning of February, a Director within Oracle purchased a whopping 15,000 shares at an approximate price tag of $83 per share.
Oracle shares have been stronger than the S&P 500 by a fair margin year-to-date, signaling that buyers have defended the stock at a much higher level than most. The company has been firing on all cylinders – Oracle has exceeded top and bottom-line estimates in seven of its eight previous quarterly reports.
Bottom-line projections allude to rock-solid growth. For the current fiscal year, the Zacks Consensus EPS Estimate resides at $5.21, reflecting a solid 6.3% year-over-year uptick. Furthermore, earnings are expected to grow an additional 9.3% in FY23.
Top-line projections are just as stellar – Oracle is forecasted to generate $49.7 billion in revenue in the current fiscal year (FY23), a 17% double-digit year-over-year increase. The growth doesn’t stop there, as the company’s top-line is forecasted to tack on an additional 5.2% in FY24.
Oracle shares trade at an enticing 6% discount relative to the S&P 500. The company’s forward earnings multiple of 17.6X is just above its five-year median of 16.6X but well below highs of 25.6X in 2021.
Bottom Line
It’s seemed that buyers have entirely retreated in 2022 amid the vast sea of red. However, insiders are still buying, undoubtedly a positive.
Of course, it’s always a good sign to see an insider buy a stock. It’s generally a reflection of their views on the company, signaling that they believe the stock price will go up.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
After a challenging start to 2022, a somewhat clearer economic outlook has lifted stocks as of late. Buyers have finally returned after seemingly being nowhere to be found.
However, they weren’t entirely gone.
Throughout the year, there have been several notable insider buys within several tech titans, including Netflix (NFLX - Free Report) , Adobe (ADBE - Free Report) , and Oracle (ORCL - Free Report) .
The chart below illustrates the year-to-date share performance of all three companies.
Insider buys are widely followed by investors as they’re generally a good indicator of the company’s current health. After all, if an insider is selling, why would an investor want to buy?
Let’s take a closer look at each company's forecasted growth rates to get a clearer view of what enticed the insiders.
Netflix
We’re all familiar with Netflix (NFLX - Free Report) , the titan that has taken the digital streaming industry to the next level. Earlier in the year, an Officer purchased approximately 51,000 NFLX shares at a price of around $385 per share.
It’s undoubtedly been a rough stretch for Netflix shares in 2022, down more than 60%. A slowdown in subscriber growth has been a primary driving force behind the poor share performance. However, the company has chained together four consecutive bottom-line beats.
Netflix’s bottom-line is forecasted to decrease by nearly 11% in FY22, but growth is projected to pick back up in FY23, with the Zacks Consensus EPS Estimate of $10.06 reflecting a solid 9% uptick in earnings year-over-year.
The company’s top-line appears to be in much better shape - for FY22, NFLX is forecasted to generate $31.7 billion in revenue, a 6.6% increase when compared to FY21 sales of $29.7 billion. In addition, the top-line is projected to tack on an additional 7.3% in FY23.
Following the sell-off, Netflix shares trade at much more reasonable valuation levels. The company’s 22.4X forward earnings multiple is a fraction of its five-year median of 82.1X. Shares now trade at a 19% premium relative to the S&P 500.
Adobe
Adobe (ADBE - Free Report) is one of the biggest software companies in the world, generating the bulk of its revenue via licensing fees from its customers. In January, an Adobe Director purchased approximately 1,000 ADBE shares at a price of roughly $515 per share.
Software stocks have tumbled in 2022, and ADBE has been no exception – shares are down more than 25% year-to-date. However, the company has continued to report bottom-line results above expectations, exceeding the Zacks Consensus EPS Estimate in 14 consecutive quarters.
In addition, growth estimates for both the top and bottom-lines are rock-solid. For the current fiscal year (FY22), Adobe’s bottom-line is projected to register a solid 8.3% uptick year-over-year. And in FY23, earnings are forecasted to grow an additional 16%.
Adobe’s top-line is also in remarkable shape; annual revenue is forecasted to climb to $17.7 billion in FY22, a notable 12% uptick year-over-year. Even more impressive, the FY23 annual sales estimate of $20.1 billion reflects another double-digit increase in revenue of 14% year-over-year.
Adobe’s valuation levels are elevated but are low relative to where shares have traded in the past. Its 37.3X forward P/E ratio is nowhere near its five-year median of 45.6X and highs of 66.3X in 2020.
Shares trade at a 99% premium relative to the S&P 500.
Oracle
Oracle (ORCL - Free Report) is an American multinational computer technology corporation selling database software and technology, cloud-engineered systems, and enterprise software products. Around the beginning of February, a Director within Oracle purchased a whopping 15,000 shares at an approximate price tag of $83 per share.
Oracle shares have been stronger than the S&P 500 by a fair margin year-to-date, signaling that buyers have defended the stock at a much higher level than most. The company has been firing on all cylinders – Oracle has exceeded top and bottom-line estimates in seven of its eight previous quarterly reports.
Bottom-line projections allude to rock-solid growth. For the current fiscal year, the Zacks Consensus EPS Estimate resides at $5.21, reflecting a solid 6.3% year-over-year uptick. Furthermore, earnings are expected to grow an additional 9.3% in FY23.
Top-line projections are just as stellar – Oracle is forecasted to generate $49.7 billion in revenue in the current fiscal year (FY23), a 17% double-digit year-over-year increase. The growth doesn’t stop there, as the company’s top-line is forecasted to tack on an additional 5.2% in FY24.
Oracle shares trade at an enticing 6% discount relative to the S&P 500. The company’s forward earnings multiple of 17.6X is just above its five-year median of 16.6X but well below highs of 25.6X in 2021.
Bottom Line
It’s seemed that buyers have entirely retreated in 2022 amid the vast sea of red. However, insiders are still buying, undoubtedly a positive.
Of course, it’s always a good sign to see an insider buy a stock. It’s generally a reflection of their views on the company, signaling that they believe the stock price will go up.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
Get the latest research report on NFLX - FREE
Get the latest research report on ORCL - FREE
Get the latest research report on ADBE - FREE