Our recommendation for Dun & Bradstreet (DNB) is a "high conviction call" on insider buying, explains Jim Osman, editor of Spinoff Report Lite — and a participant in the MoneyShow July 13-15 Virtual Expo. Register here for free.

Here is a list of the major factors we are considering in our buy recommendation for the stock.

• Transitioning to New Cloud ERP:

Post-IPO, DNB spend 9 months in order to update its enterprise resource planning (ERP) software to a modern SaaS platform, which will help drive growth going forward.

• Smart Insider Buys Again (June 2, 2021) / Vote of Confidence:

Anthony Jabbour (CEO) bought another 47,700 shares @ $20.96, spending another ~$1m to increase his stake in DNB on the open market post earnings.

This is his third insider purchase in DNB, each time spending close to $1m to increase his stake, with his average purchasing price @ $23.50 and close to $3m in total so far.

• Officer Following CEO’s Lead (June 2, 2021):

Bryan Hipsher (CFO) has been following Mr. Jabbour’s buying patterns but not spending the same amounts. Just recently, Mr. Hipsher bought 3,000 shares @ $21, spending $63,000, which isn’t his most expensive spend of his three purchases but spending $285K for all three buys.

• Track Record of Buys / Part of Successful Spinoff:

Mr. Jabbour is also the CEO and at Black Knight (BKI), a previous spinoff from Fidelity National Financial Group (FNF) in September 2017 and a major stakeholder in DNB (less than 20%). BKI’s stock price has jumped +70% since its Spinoff. Mr. Jabbour also has a strong track record of insider purchases of BKI stock.

• Recent Hires:

DNB recently hired Virginia Gomez (Chief Product Officer, ex TRU) and Michael Manos (Chief Tech Officer, ex Fiserv and leadership roles at AOL Services, Nokia, Digital Realty, Microsoft and Disney).

Overall, we see upside in DNB shares of +40% (as a base case) with potential upside of 85% (bull case).

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