Aptiv PLC (APTV) Q4 2020 Earnings Call Transcript

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2 Stocks Flashing Signs of Strong Insider Buying

Tracking insiders’ stock purchases can make a viable investment strategy. Corporate insiders – the company officers and board members – are naturally positioned to be in the know, to know how company policies and performance will impact stock prices. They can use that knowledge to inform their own stock purchases – but not unfairly. By law, they must disclose publicly their own stock holdings, and the general public can learn from those purchases and sales. Insider moves can informative or uninformative. The latter are simple shifts in portfolio holdings, usually not of great magnitude, done to tweak an ownership percentage or adhere to a tax regulation. The informative moves, however, are different. These are the big-number buys and sells – and when an insider, or several insiders, start making informative share moves, market watchers should take note. These are signs that something big may be in store. TipRanks follows the insiders’ trades, making use of the publicly published stock moves to track them. The Insiders’ Hot Stocks page provides the scoop on which stocks the market’s insiders are buying so that you can make informed purchases. We’ve picked two stocks with recent informative buys to show how the data works for you. Brown & Brown (BRO) Brown & Brown is an insurance company – one that does over $2.3 billion in annual business. The company is based in Florida, boasts a market cap of $12.4 billion, has 300 office locations, and is the fifth largest insurance broker in the US. Brown & Brown deals in risk management, offering insurance products for customers of all sizes: government agencies, professional organization, businesses, corporations, and families and individuals. Brown & Brown has seen its revenues and earnings rise year-over-year during the corona crisis – which makes sense, as a stable and reliable insurance company should expect to see an increase in business during unsettled times. The 4Q20 results showed revenue of $642.1 million, up 10.9% yoy. Earnings came in at 34 cents per share, an increase of 25% yoy. On the insider front, Board of Directors member James Hay put down $433,750 for a purchase of 10,000 shares on January 29. This brings the insider sentiment here into positive territory. Truist analyst Mark Hughes, rated 5-stars by TipRanks, sees Brown & Brown as a solid choice for investors interesting in the insurance sector. “The company is generating solid organic revenue growth, margins should be steady-to-up this year, and M&A activity has been healthy, all of which should drive solid top- and bottom-line expansion in coming periods. We believe BRO shares remain a good way for investors to get exposure to the recovering economy and firming P&C pricing,” Hughes opined. In line with his optimistic approach, Hughes rates BRO a Buy, and his $55 price target indicates confidence in ~25% growth for the next 12 months. (To watch Hughes’ track record, click here) Is the rest of the Street in agreement? As it turns out, the analyst consensus is more of a mixed bag. Split almost right down in the middle, 4 Buy ratings and 5 Holds were assigned in the last three months, giving BRO Moderate Buy status. With a $51.44 average price target, the potential twelve-month gain comes in at 17%. (See BRO stock analysis on TipRanks) Crown Castle (CCI) The second insider pick we’re looking at, Crown Castle, is a real estate investment trust with a twist. The company owns and manages communications infrastructure, specifically, the tower and transmitter locations so important to cellular networks. Crown Castle’s property portfolio includes more than 40,000 towers, 70,000 small cell locations, and 80,000 miles worth of connecting fiber optic cables. The rollout of the new 5G wireless network has been a boon to Crown Castle’s model in the past year. Crown Castle’s revenues remained steady through 2020, ranging between $1.4 to $1.49 billion, with the third and fourth quarter results both at $1.49 billion. For Q4, that was an 11% yoy gain. For 2020 as a whole, CCI reported $5.3 billion, up 3.8% yoy. Crown Castle’s position was sound enough that the company raised its dividend payment by more than 10% in December. The new payment, $1.33 per common share, gives an annual payment of $5.32 and a yield of 3.2%. Turning to the insider trades, we find that Kevin Stephens, one of the company’s Directors, paid $328,300 for a bloc of 2,000 shares. Stephens now owns $671,000 worth of CCI; this recent purchase nearly doubled his total holding. 5-star analyst Colby Synesael, from Cowen, takes a highly bullish stance on Crown Castle. He notes that CCI has “a new agreement with Verizon in which the carrier has agreed to lease 15K small cells from Crown that will install over the next four years…” The analyst added, “[We] estimate the avg. ARPU is $500/mo. (w/ a 1.5% escalator), suggesting an initial annualized value of ~$90MM. The deal represents the company’s largest single small cell deal in its history… the deal raises Crown’s small cell backlog to ~30K from previously ~20K.” Synesael’s confidence is clear from his Outperform (i.e. Buy) rating on the stock. His $197 price target suggests a one-year upside of 21%. (To watch Synesael’s track record, click here) Overall, Wall Street’s analysts like what they see here. CCI’s Strong Buy consensus rating is based on 8 recent reviews, breaking down to 7 Buys and a single Hold. CCI’s average price target is $177.25, implying a 9% upside from the current share price of $177.25. (See CCI stock analysis on TipRanks) To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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