A volley of global uncertainties, including continuing supply chain pressures; Russia’s invasion of Ukraine; escalating prices; rising inflation; and labor shortages, have shaken the stock markets across the world.
Investors are flustered, unable to decide where to safely park their funds for investments. In these tough times, a good way to know where to make investments is to know what the insiders are buying.
It is a well-known fact that a company’s insiders buy their own company’s stock when they believe that the firm’s future prospects are bright and could yield financial gains in the short-to-medium term.
TipRanks Insiders’ Hot Stocks tool allows investors to track the transactions of companies’ top management. Let us take a look at a UK-based stock, Beazley (GB:BEZ), that should ignite investor interest.
Beazley (GB:BEZ) Stock Analysis
Headquartered in London, Beazley is a holding company of specialist insurance businesses. The company provides professional indemnity, property, marine, reinsurance, accident and life, and political risk and contingency insurance services in the United States, Europe, and internationally.
On May 9, Beazley reported robust Q1 results. Notably, gross written premiums (GWP) grew 27% year-over-year to $1.22 billion compared to $971 million in Q1 2021.
The impressive GWP growth reflects a combination of rate increases as well as additional exposure in a number of areas. Furthermore, premium rates on renewal business increased by 17%, with premium growth witnessed in most of its divisions.
Notably, the company stated that the combined ratio, a key measure of profitability for insurers, is expected to remain around 90% for the full year.
Insiders at Beazley are clearly optimistic about the stock’s near-term prospects and have bought stock worth £101,300 in the past three months.
Specifically on the insider front, we note that Director Rajesh Agrawal is positive on the stock with a recent informative buy. He spent £101,340 to purchase 23,000 shares of BEZ stock at GBp441, and now holds shares worth £104,880.
Last week, Berenberg analyst Tryfonas Spyrou reiterated a Buy rating on Beazley and increased the price target to GBp630 (51.75% upside potential) from GBp610 earlier.
Spyrou was impressed by the reaffirmed full-year combined ratio guidance of 90% in spite of the probable losses expected from the war in Ukraine to the tune of $50 million.
Spyrou remains bullish on the stock as he believes “Beazley continues to take advantage of rates to grow volumes, particularly across its speciality lines”.
Regarding the aviation exposure and the probable aviation losses, the analyst stated, “While full clarity on ultimate aviation losses will take a while to emerge, in our view these comments are very reassuring and should significantly alleviate investor concerns.”
The Wall Street community is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on eight Buys and three Holds. The average Beazley price target of GBp556.36 implies 15.91% upside potential to current levels.
TipRanks’ Smart Score
Notably, Beazley scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
Key Takeaway
Surely, insider buying signals aid in stock analysis but ideally they should not be the only consideration that drives investment decisions. Positively, shares of the specialty insurer have gained almost 60% in the past year.
An improved overall rating environment as well as stabilized rates, as seen in higher gross premiums written, bodes well for the stock in the coming times.
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