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Argus Research Eyes Insider Trends

08/24/2016 9:00 am EST


Stephen Biggar

Director, Product Strategy, Argus Research Corporation

With major market indices flirting with all-time highs, insider sentiment remains cautious, explains Stephen Biggar, director of product strategy for Argus Research.

End of day, we are not ringing any alarms — but do note that insiders seem to think the post-Brexit low-hanging fruit is no longer available.

On a day when Delta Air Lines (DAL) was in the news for a power outage that forced the airline to suspend flights worldwide, we note insiders at the company purchased a total of 35,000 shares recently.

Director George Mattson purchased 10,000 shares through direct open-market acquisitions, increasing his total direct holdings to 54,750 shares. He has been steadily increasing his holdings for several years now.

Executive Vice President & CFO Paul Jacobson purchased 25,000 shares, marking his first direct open-market acquisition on record and bringing his total reported holdings to 328,613 shares.

The DAL shares are currently trading at the low end of their recent trading range. Argus currently has a BUY rating on Delta and notes that Delta posted second-quarter earnings that rose from last year and topped the consensus estimate.

Director Thomas Woods at Bank of America (BAC) purchased 25,000 BAC shares, increasing his holdings to 32,459 shares. This was his first direct open-market acquisition on record.

Argus has a BUY rating on BAC, noting the company reported 2Q16 earnings of $0.36 per share, down from $0.43 a year earlier — but $0.03 ahead of the consensus forecast.

While revenues were challenged by the low interest-rate environment and weaker capital markets, the broader franchise benefited from solid growth in loans and brokerage assets and significantly lower costs. Argus currently has a target price of $18 on the BAC shares.

Director Dennis Muilenburg of Caterpillar (CAT) purchased 1,930 CAT shares, increasing his holdings to 9,558 shares. The recent performance of the company generally has been solid.

CAT also boasts a dividend yield of 3.8%, and management has a 22-year history of raising the payout. Argus rates CAT a BUY with a target price of $92.

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By Stephen Biggar, Director of Product Strategy at Argus Research

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