Success in the stock market is dependent upon multiple macro and micro factors. On the broader front, the health of the domestic and global economy as well as prevalent rules and regulations of the market can impact investment decisions.
At the micro level, an investor’s knowledge of the market, investible funds, risk-taking appetite, and expertise in quickly analyzing and leveraging available information can play an important role in profiting from stock market investments.
It is the task of analyzing the prevalent information in the market that can be further simplified with the use of various tools offered by TipRanks. A unique tool, Insider’s Hot Stocks, compiles the buying and selling activities of corporate insiders, including officers, top management officials, and executives.
The Insider’s Hot Stocks tool uses four strategies, including Transaction, C-Level, Major Event, and Top Ranked. All the strategies have fared well, yielding annualized returns of 11.37% for Transaction, 22.82% for C-Level, 27.59% for Major Event, and 25.24% for Top Ranked.
By market capitalization, the top three companies that have witnessed heavy insider activities in the past seven to eight days are General Electric Company (NYSE: GE), HCA Healthcare, Inc. (NYSE: HCA), and Occidental Petroleum Corporation (NYSE: OXY). The selection has been done from 74 hot stocks featured on the tool at the time of writing.
A brief discussion on these hot insider-friendly companies is provided below.
General Electric
The $80.7-billion company operates in multiple industries, including power, aviation, renewable energy, and healthcare.
For 2022, General Electric anticipates organic revenues to grow in high-single-digit and adjusted earnings per share to vary within the $2.80-$3.50 per share range.
In April, General Electric’s Chairman and CEO, H. Lawrence Culp, Jr., said, “Our continuous operational improvements set us up to reinvest in innovation across GE, and our businesses remain focused on growth, supported by continued recovery at Aviation and strong demand at Healthcare.”
He added, “…as we continue to work through inflation and other evolving pressures, we’re currently trending toward the low end of the range.”
As per TipRanks, the Insider Confidence Signal around the company is presently Negative. Three days ago, the Director at GE, Paula Rosput Reynold, made an ‘Informative Buy’ of 1.2 thousand shares for $93.18 thousand.
The Boston, MA-based conglomerate has a Moderate Buy consensus rating based on nine Buys and four Holds. GE’s average price target of $104 suggests 43.57% upside potential from current levels. Over the past month, shares of General Electric have declined 19.5%.
HCA Healthcare
The Nashville, TN-based company provides healthcare services through urgent care centers, hospitals (psychiatric and general), emergency rooms, and others. Over the past month, shares of HCA Healthcare have lost 19.7%.
In April, the company projected revenues to be $59.5-$61.5 billion in 2022, lower compared with the prior expectation of $60-$62 billion. Earnings are expected within the $16.40-$17.60 per share range, down from $18.40-$19.20 per share predicted previously.
The company’s CEO, Sam Hazen, said, “In the first quarter, we had a number of positive volume and revenue indicators. Unfortunately, they were offset by higher than expected inflationary pressures on labor costs.”
The TipRanks Insider Trading tool reveals that corporate insiders have bought $11.9 million worth of HCA shares in the last three months. The Insiders Confidence signal is presently Neutral on HCA.
Seven days ago, Whalen Kathleen M, the company’s SVP and Chief Ethics Officer, made an ‘Informative Sell’ of 500 shares for $107.7 thousand. Also, Thomas F. Jr. Frist, the company’s owner, accomplished an ‘Informative Buy’ of 89.1 thousand shares for $18.9 million.
Presently, the $66.3-billion company has a Moderate Buy consensus rating based on 11 Buys and four Holds. HCA’s price forecast is pegged at $252.93, mirroring an upside potential of 20.71% from current levels.
Occidental Petroleum
The company explores and produces oil and natural gas. Its headquarters is located in Houston, TX.
For 2022, Occidental Petroleum anticipates oil and gas production to be within 1,140-1,170 thousand barrels of oil equivalent per day (Mboed). Exploration expenses for the year are expected to be $215 million.
Recently, the company’s President and CEO, Vicki Hollub, said that the company was preparing “to deliver increased barrels of oil and natural gas to the market for the remainder of the year.”
Presently, the Insider Confidence Signal is Positive for Occidental Petroleum. In the last three months, corporate insiders have bought $6 billion worth of OXY shares.
Eight days ago, Bershire Hathaway Inc., the owner of >10% interest in the company, made an ‘Informative Buy’ of 5.89 million shares for $336.2 million.
Overall, the company has a Moderate Buy consensus rating based on 10 Buys, seven Holds, and two Sells. OXY’s average price target is $68.44, reflecting upside potential of 13.88% from current levels. Shares of this $55.7-billion company have increased 1.6% in the past month.
Conclusion
It is evident from the aforementioned discussion that proper tracking and analysis of corporate insiders’ activities may help investors in enhancing their portfolio returns. However, due importance should be given to other important parameters like the company’s and industry’s fundamentals and projections.
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