Investing

Latest Orion Engineered Carbons Insider Buys Show Officer Sentiment on Share Price Gains

Ben Ward

Published: March 16, 2023 10:32 pm

On Wednesday evening, two form 4’s filed with the SEC revealed company officers from Orion Engineered Carbons (US:OEC) had purchased stock in the trading window following fourth quarter and full year results.

The transactions were initially spotted on Fintel’s insider trading tracker later on Wednesday evening.

The company insiders bought stock even with shares trading 46.7% higher on a 1 year view and up a hefty 36.7% in 2023 alone. Although the share price has appreciated fast in recent months, the stock continues to trade on an undemanding PE ratio of 13.8x relative to broader US equity markets.

Significant academic research suggests that corporate insiders outperform the market when buying shares in their own companies, as in this instance.

Bullish Sentiment

Orion’s CFO Jeffrey Glajch reported the purchase of 10,000 shares earlier on Wednesday at $23.81 per share with a total transaction value of $238,185. Glajch owns a total of 60,666 shares after the transaction.

The second officer to report buying shares was Senior Vice President of Global Operations, Carlos Quinones, who increased his stake with a 3,800 share purchase in trading on Monday. Quinones paid $23.98 per share with the transaction worth $91,124, boosting his total share ownership count to 52,335.

The two transactions have contributed to Fintel’s bullish officer sentiment score of 85.81 which ranks OEC in 133rd rank or the top ~1% out of 11,833 screened global securities for the highest levels of officer buying activity.

For some perspective, Orion stock has also see high levels of institutional buying activity as described by Fintel’s bullish fund sentiment score of 84.82. OEC ranks in the top 30% out of 35,763 global securities for the highest levels of institutional accumulation in the last 90 days.

There are a total of 368 institutions on the register, that collectively own 63.1 million shares. The largest holders include Pzena Investment Management LLC, BlackRock Inc, T. Rowe Price Investment Management Inc., William Blair Investment Management, Inherent Group Lp, Hawk Ridge Capital Management Lp, Harvey Partners LLC, Minneapolis Portfolio Management Group LLC, and Vanguard Group Inc.

Estimate Beat

At Orion’s most recent financial fourth quarter investor update, the company reported sales of $462 million which beat market expectations of around $440 million by 5%.

The group’s reported underlying profits measured by adjusted EBITDA of $65 million, coming in around 16% above polled analyst estimates of $56 million.

Adjusted net income rose from $10.7 million in 2021 to $15.7 million in the final quarter of 2022 or adjusted EPS 26 cents per share. The result was around 10 cents ahead of analyst forecasts.

For 2023, Orion’s management told investors that it expects to grow adjusted EBITDA from $312.3 million in 2021 to a range of $350 to $380 million and adjusted EPS from $1.96 in 2021 to $2.30 to $2.60 per share.

Fintel’s consensus target price of $33.15 tells us that analysts are still bullish that the stock will rise further from here in 2023 and the stock could rally another 40% this year.

Earlier this week, Credit Suisse (US:CS) initiated coverage on the stock with an outperform recommendation and $31 target price. OEC stock has an average rating of buy and price targets ranging from $26 to $40, according to analysts polled by S&P Capital IQ.

This article originally appeared on Fintel