For investors seeking a clear path in the markets, some signal that will cut through all the noise and show just which stocks are likely to gain despite a growing storm of headwinds, the insiders cannot be ignored.
We’re referring to corporate officers who hold high posts of responsibility within their firms. They’re CEOs and COOs and CFOs, Exec VPs and members of the Board, and these posts give them two undeniable attributes. First, a macro-view of the company and its prospects; and second, a need to answer to shareholders and Directors for company performance.
What that boils down to is, corporate insiders don’t trade stock in their own companies lightly. Their moves are scrutinized from within – and from the Federal regulators, who require them to publicly report their trading.
Investors can look to these moves, using TipRanks’ Insiders Hot Stocks tool. We’ve used that tool to do just that, find three stocks whose insiders have been buying recently. There are other positive signifiers to follow; these stocks are rated as Strong Buys by the analyst consensus and are projected to pick up steam in the months ahead.
We’ll start in a sector that doesn’t always get the attention it should – children’s toys. They have a ready and eager customer base, and the big toy makers spare no expense on market research, or on brand acquisition. Hasbro, the first stock on our list, is a venerable name in the industry, going back to 1923, and owns a series of major toy and game names and brands, including Milton Bradley, Kenner, Dungeons & Dragons, My Little Pony, Power Rangers, Monopoly, Transformers, and PJ Masks. The company saw $6.42 billion at the top line in 2021, up 17% from the prior year.
Hasbro is working to improve its position in regard to its peers by a strong move toward digital and table gaming. These are growth segments of the toy industry, and Hasbro, holding names like D&D and Wizards of the Coast, is well-positioned make gains here.
In April of this year Hasbro reported its 1Q22 results, with the top line beating the forecast for the fourth quarter in a row while the bottom line came in below estimates. On revenue, the company showed $1.16 billion, above the $1.14 consensus mark. EPS came in at 57 cents, missing the 61-cent forecast.
Despite the earnings miss, Hasbro has seen some recent insider purchases that are pushing the insider sentiment needle into positive territory. CEO Christian Cocks spent $905,000 on 10,102 shares of Hasbro, while Board of Directors member Michael Raymond Burns made a smaller purchase of 2,500 shares, paying $219,250.
Hasbro has scored fans within the analyst community as well. Analyst Alok Patel, from Berenberg, rates the stock a Buy, while his $118 price target implies a one-year upside of 32%. (To watch Patel’s track record, click here)
Backing his stance, the analyst writes: “Our Buy thesis for HAS is predicted on two key points. 1) Consumer products remains resilient; and 2) HAS’s first mover advantage in content driven strategies, coupled with gaming, should translate to outperforming peers and the overall toys industry… We note the WoC and Entertainment segments continues to grow and allow HAS to better protect margins compared to traditional toy makers. Impressive growth profile of the segments has drawn management to increase investments in both segments.”
The insiders and Berenberg are bullish here – and they are not outliers. The stock has 8 recent analyst reviews, with a 6 to 2 breakdown of Buys over Holds supporting its Strong Buy consensus rating. The shares are priced at $89.54 and their $108.50 average price target suggests an upside of 21% for HAS going forward. (See HAS stock forecast on TipRanks)
Now we’ll turn to the financial sector, where BlackRock, holding more than $10 trillion in total AUM, is one of the world’s largest asset managers. Since 1988, the company has served institutional clients, governments, financial advisors, and high-net-worth individuals – but it hasn’t neglected the small-time retail financial market, either. BlackRock’s services are available in 38 countries and 82 languages, and it is the company’s boast that it can tailor a financial plan for any client at any scale.
Earlier this month, BlackRock reported its financial results for 1Q22, and came in ahead of the estimates. The company showed a 7% year-over-year gain at the top line, with $4.7 billion in total revenue. Earnings, at $9.52 per diluted share, grew 18% y/y, and handily beat the $8.74 forecast. In all, it was a strong start for 2022.
Clearly, BlackRock’s insiders would agree. William Ford, of the company’s Board of Directors, made two purchases in the middle of this month, spending a total of $2.06 million to buy 3,000 shares of BLK.
In coverage for Morgan Stanley, analyst Michael Cyprys appears to echo the Director’s bullish sentiment. He writes, “BLK remains focused on investing for growth while staying prudent should market conditions become more challenged. But we’re confident in BLK’s track record to deliver return on spend via durable topline growth opportunities…”
“We view BLK as an all-weather name among the traditional asset mgrs given their diversified/scale business model that can better navigate a more difficult macro backdrop, harness Aladdin technology capabilities to unlock growth, and act strategically from a position of strength,” the analyst added.
These comments back up Cyprys’ Overweight (i.e. Buy) rating on this financial stock, while his price target, at $932, indicates confidence in ~40% upside by year’s end. (To watch Cyprys’ track record, click here)
Major financial companies typically get plenty of attention from the Street, and BlackRock is no exception. There are 14 recent analyst reviews here, and they include 11 to Buy against 3 to Hold for a Strong Buy consensus. BLK is selling for $668.28 and its $870.07 average price target implies ~30% upside in the coming months. (See BLK stock forecast on TipRanks)
Inozyme Pharma (INZY)
Let’s wrap up with a biopharmaceutical firm. Inozyme is researching new treatments for rare diseases of the vascular and skeletal systems, as well as soft tissue diseases. Specifically, the company is focusing on a class of dangerous conditions with few treatments: abnormal mineralization disorders, which lead to permanent and crippling illnesses. The company’s clinical program is working on new therapeutics to treat genetic deficiencies in the ENPP1 and ABCC6 genes.
Inozyme’s research is currently narrowed in one drug candidate, INZ-701, which is considered particularly promising for a wide range of applications. The company has two Phase 1/2 trials underway, testing the drug against both ENPP1 and ABCC6 deficiencies. Earlier this month, Inozyme hit a major milestone when it announced positive initial data from both trials.
On April 4, Inozyme released early results showing that the lowest-dose cohort in the ENPP1 study delivered a sustained improvement in plasma pyrophosphate levels. While this was based on only 3 patients, all showed levels that compare to observations of healthy individuals. Additionally, all three patients tolerated the drug well, with few side effects. Inozyme is proceeding with dosing the second study cohort at the next dose level. Topline data on this study is expected in 2H22.
Next, on April 12, the company announced that it had dosed the first patient in its study of ABCC6 deficiency. This is another Phase 1/2 clinical trial that will test dose escalation and toleration, along with preliminary biomarker and safety data. The company expects to release this information in 2Q22. Together, these announcements were a major even for the company, as they mark an important de-risking of INZ-701.
Clinical trials cost money, however, and Inozyme has also announced, on April 14, an offering of more than 16 million shares of stock at $3.69 per share. An insider, Robert Hopfner of the Board of Directors, bought in big during the sale, picking up 1,070,000 shares for a total price of nearly $3.95 million.
A clear description of the bullish view on Inozyme comes from Christopher Raymond, of Piper Sandler, who says, “We recommend investors take a close look at this name as we believe this stock serves as a prime example of ‘throwing the baby out with the bathwater’ in the midst of one of biotech’s deepest and most prolonged swoons. Just by looking at the chart, one would think a major failure or pipeline reset has taken place. To the contrary, however, ‘701 had initial PoC data that unlocks a $0.5B WW revenue opportunity for a serious ultra-orphan disease (ENPP1 deficiency) with no meaningful clinical alternatives. Coupling this with a meaningful opportunity in another ultra-orphan disease (ABCC6 deficiency), with PoC coming soon, we think this name has a risk/reward that requires a closer look.”
In line with these bullish comments, Raymond gives INZY shares an Overweight (i.e. Buy) rating, and his $40 price target implies a robust 681% one-year upside potential. (To watch Raymond’s track record, click here)
Neither the insider nor the Piper Sandler analyst are outliers here, as Wall Street gives INZY shares a unanimous Strong Buy, based 5 positive analyst reviews. The stock has an average target of $30, which suggests ~486% upside from the current trading price of $5.12. (See INZY stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.