Investing

These 10 Stocks Have the Highest Officer Buying Activity

Ben Ward

Published: April 24, 2023 7:10 am

Last Updated: April 24, 2023 12:13 pm

Investors and analysts alike are always on the lookout for signals that indicate the potential for growth in a particular stock. One such signal that has been studied and analyzed extensively is the insider buying of company stock by its officers.

There is significant academic research that suggests corporate insiders outperform the market when buying shares in their own companies. These individuals have access to a wealth of information about the company’s financial health, growth prospects, and future plans that the general public does not. As a result, their decision to buy company stock with their own money is viewed as a strong vote of confidence in the company’s future prospects.

Fintel’s Officer Sentiment quant model identifies companies that experienced significant officer buying activity in the last 12 months.

Fintel analyzes three metrics included in this quant model:

• Open market purchases made by corporate officers who are directly involved in the daily business operations.
• The total dollar amounts spent to buy the shares.
• The average purchase price of shares bought.

The final metric is important because if the current share price is below the average purchase price (meaning their trades are at a loss), then the officers will be highly motivated to recoup those losses.

Let’s have a look at the top 10 stocks by highest insider sentiment score, as of April 21.

Carvana Co. (US:CVNA) tops the list with an officer score of 98.85. The e-commerce platform for buying and selling used cars has a market cap of $915.28 million after shares have plummeted 90% over the last year. Five company officers poured in $167.09 million of capital into the company as part of equity financing requirements. The officers have seen those investment lose 87.54% of their value. Now trading at $8.14 a share, CVNA stock was as high as $370.10 in August 2021.

Beverage company Keurig Dr Pepper Inc. (US:KDP) is the second-highest scoring stock on our list with an officer score of 98.72. With a market cap of $49.72 billion, KDP had six officer buyers over the 12 months, who acquired $13.50 million worth of the shares. The average purchase price is $36.40 which is around current levels.

B. Riley Financial Inc. (US:RILY) ranks in third with a score of 97.46. This is a financial services company that offers a range of services, including investment banking, wealth management and asset management. With a market cap of $910.07 million, RILY stock has had four officers buying shares in the last year, purchasing $43.03 million worth of the stock. The average purchase price is $43.26 per share, well above the current $32.77 share price indicating officers have lost about 27% of value of their purchases.

Entertainment and dining company , Dave & Buster’s Entertainment Inc. (US:PLAY) has an officer score of 97.05, the fourth highest in our list . With a market cap of $1.69 billion, PLAY stock has had eight officers buying the shares in the last 12 months, with purchases totaling $3.24 million. The officers are marginally ahead on their purchase with an average gain of 4.51% based on a purchase price of $33.41 vs the current price $34.92.

Charles Schwab Corp. (US:SCHW) has an officer score of 96.98 and is a financial services company that provides a range of brokerage, banking, and financial advisory services. With a market cap of $101.04 billion, SCHW had four officers buying in the last year, for a total of $13.46 million. The stock price has declined 14.55% vs. the average purchase price of $65.02 for the officers.

Ivanhoe Electric Inc. (US:IE) has an officer score of 96.62. It is an exploration company focused on the acquisition and development of natural resource properties, primarily in Canada. With a market cap of $1.14 billion, IE stock has had four officer buyers in the last year, purchasing $9.11 million in dollar volume. The officers have seen gains of 38.56% on average based on a purchase price of $8.88, vs the current price of $12.30.

Beachbody Company Inc. (US:BODY) is a health and wellness company that provides fitness programs and nutrition products. The shares have an Officer Score of 96.25. With a market cap of $148.75 million, BODY stock has had four officers buying shares in the last year, acquiring in $6.39 million in dollar volume. The average purchase price of those transactions is $1.44 per share, meaning on average the officers have seen declines of almost 67% on their buys as the current share price is $0.47.

Brookfield Residential Properties Inc. (US:BRP) is a real estate company that focuses on developing and managing residential properties in North America. With a market capitalization of $1.57 billion, BRP stock had four officers buying shares in the last year for a total of $5.56 million. The average purchase price of those shares was $27.94, and the current share price is $25.31, indicating a decline in value of 9.48% in the past year. Despite this decrease in share price, BRP has an Officer Score of 96.03, which is the eighth highest on this list.

Enviva Inc. (US:EVA) is a biomass energy company with the ninth-ranked Officer Score of 96. The company produces and supplies sustainable wood pellets for power generation. With a market capitalization of $1.73 billion, EVA stock had five officers buying in the last year, at a dollar volume of $2.92 million. The average purchase price of those shares was $55.91, and the current share price is $23.34, indicating a decrease of 58.26% in the past year.

Macerich Co. (US:MAC) is a real estate investment trust (REIT) that specializes in the acquisition, development, and management of retail properties across the United States and is the final stock on the list with an Officer Score of 95.69. With a market capitalization of $2.19 billion, MAC had six officers buying in the last year, at a dollar volume of $2.03 million. The officers have seen those purchases, on average, increase 15.18% in value based on the share price vs purchase price.

This article originally appeared on Fintel