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Insider Buying Heating Up at McDonald’s and Intel
Stock Analysis & Ideas

Insider Buying Heating Up at McDonald’s and Intel

I don’t think I need to be the one telling you that a company’s internal operations are well oiled when its own management chooses to assume financial liability on the very company it’s working for. It’s both trivial and theoretically substantiated that insiders buy their own company’s stock when they believe the firm’s prospects could yield financial gains in the short-to-medium term.

The insider buying feature at TipRanks allows us to track the transactions of companies’ management, and I’ve noticed some unusual activity at McDonald’s (MCD) and Intel (INTC). I subsequently analyzed the two companies’ recent developments and decided that I’m bullish on both.

McDonald’s Stock Analysis

The multinational fast food corporation’s low-sales price business model could serve it well in the coming year. The firm sells Giffen goods; Giffen goods are lower-cost goods with a high-substitution effect during challenging economic times.

I believe we’ll see many consumers substituting expensive food choices for more affordable options in the medium term as non-core inflation just doesn’t seem to find calm.

Insiders at McDonald’s are clearly optimistic about the stock’s near-term prospects. Insiders gobbled up $244.2K worth of MCD shares in the past three months, with the latest informative sell taking place way back in October 2021.

It’s encouraging to see that McDonald’s price-to-earnings ratio of 24.7x is accommodated by a PEG ratio of only 0.40x. Cohesively considered, the two metrics tell us that the stock is trading 2.5 times below its current earnings growth, meaning that most stock market participants haven’t priced in McDonald’s earnings growth just yet.

Turning to Wall Street, McDonald’s has a Strong Buy consensus rating, based on 20 Buys and three Holds assigned in the past three months.

The average McDonald’s stock price target of $282.73 implies 13.6% upside potential.

Intel Stock Analysis

There’s a lot of buzz in the tech space regarding Intel’s new Iris Plus, which is being touted as one of the best GPUs in the business. Although Intel is an established multinational, tech stocks in themselves are only as promising as their next invention.

Deutsche Bank’s (DBRoss Seymore agrees with my narrative and thinks Intel is turning matters around after the company plateaued for the past decade. Seymore stated: “We believe the tangible proof of success on these efforts may take years to demonstrate, as proving the execution engine is on track and regaining investors’ trust after years of misexecution will likely take longer than a few quarters.”

Bullish insiders at Intel overshadowed the bears by a ratio of 4-to-1. $497.2K worth of Intel shares were purchased by insiders during the previous quarter, suggesting that something special may be brewing.

I personally find a liking to Intel’s valuation prospects. The stock is severely undervalued, with its price-to-earnings and price-to-sales ratios trading at five-year discounts worth 17% and 14.8%, respectively, suggesting that it holds value in abundance.

On Wall Street, Intel has a Hold consensus rating based on eight Buys, 13 Holds, and seven Sells assigned in the past three months.

The average Intel stock price target of $53.76 implies 4.5% upside potential.

Concluding Thoughts

As an investor, you should use the insider buying signals as part of your analysis but don’t consider them as the only variable before making your investment decisions. My analysis leads me to believe that McDonald’s is economically aligned to prosper in 2022 and that Intel could perform well due to the transformation of its product range.

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