Finding the most promising stocks amid a sea of daily trading is no easy task for investors. One strategy worth considering is to pay attention to corporate experts.
These experts, which include top-level executives such as CEOs, CFOs, COOs, and board directors, have deep knowledge of your company’s operations. They are also entrusted with the task of generating profits for shareholders.
Armed with a combination of responsibility and deep knowledge, insiders have a unique advantage when trading their own company’s stock. Their buying or selling decisions are often based on a belief in the stock’s value appreciation potential.
With this approach in mind, we turned to TipRanks’ Insiders’ Hot Stocks tool, which identifies two stocks with recent insider transactions exceeding $1 million. These significant internal investments serve as a strong indicator for investors to dig deeper. Additionally, both stocks have earned Wall Street consensus ratings of Buy.
Mobileye Global (MBLY)
Mobileye is a technology firm deeply rooted in the automotive sector. It specializes in driver assistance and automotive sensor technologies, creating systems that equip drivers with advanced tools to improve road safety. Its namesake sensors help drivers maintain a safe distance from other vehicles, road edges, lane markings, and potential hazards. With more than 50 OEMs and 125 million vehicles worldwide equipped with its technology, Mobileye has established itself as a major player in the industry.
In addition to modernizing existing vehicles, its sensors can be installed at the factory and are adaptable to vehicles of all types. What started as a simple idea, using cameras as the backbone of a rescue system, has become a successful reality. Mobileye is now making strides in the autonomous vehicle sector, adapting its sensors to provide superior vision to autonomous vehicles. They offer options for autonomous and driver-assist vehicles, including front-facing cameras, 360-degree camera coverage, and LiDAR sensors.
Mobileye’s financial track record is compelling. Since re-entering the public markets through an initial public offering last year, the company has consistently reported quarterly profits between $450 million and $570 million.
In the most recent release of 3Q23, Mobileye’s top line reached $530 million, up nearly 18% year over year, beating forecasts by more than $2 million. Its adjusted diluted EPS, a non-GAAP metric, came in at 22 cents per share, up 7 cents from a year ago and beating estimates by 5 cents.
In terms of insider trading, board member Claire McCaskill stands out for her recent substantial buying. This month alone, it acquired 27,819 shares, investing almost $1 million. This major purchase strongly boosts domestic sentiment and brings its stake in Mobileye to over $2.9 million.
Deutsche Bank analyst Emmanuel Rosner sees immense potential in Mobileye. It states: “We believe MBLY remains the best secular story in the automotive group, reflecting the strong potential of SuperVision’s adoption curve globally in the coming years…”
Rosner’s bullish outlook culminates with a Buy rating and a $50 price target, indicating a 36% upside potential for the next 12 months. The consensus rating for MBLY is a Strong Buy, based on 14 analyst reviews, with a 13-to-1 split favoring Buys over Holds.
Fifth Third Bancorp (FITB)
Fifth Third Bancorp, the parent company of Fifth Third Bank, has a history dating back to the 1850s. Its name comes from the 1909 merger of Third National Bank and Fifth National Bank. Today, Fifth Third is a prominent banking entity, with a strong presence in the regions east of the Mississippi. It has nearly 1,100 branches and more than 40,000 free ATMs in 11 states, with a market capitalization of $18 billion.
The bank offers a wide range of personal, business and commercial banking products, covering everything from personal checking and savings accounts to insurance policies, business accounts and business checking accounts. They also provide wealth management and financial planning services.
Fifth Third’s most recent earnings report, for 3Q23, highlighted substantial numbers. The bank reported $121.6 billion in average portfolio loans and leases for the quarter, up 1.7% year over year. Average deposits during the same period grew more than 3% to $165.6 billion. Net interest income was $1.44 billion, slightly below the $1.5 billion reported in 3Q22. Net income available to common shareholders was $623 million, a decrease of 1.3% from the prior year. The company’s diluted earnings per share came to 91 cents, beating expectations by 9 cents.
Earnings comfortably covered the quarterly dividend payment of 35 cents per common share, which translates to $1.40 annualized per common share and offers investors a generous 5.3% yield, well above current inflation rates.
In terms of insider trading, we saw significant buying by C. Bryan Daniels, a member of the company’s Board of Directors. Daniels acquired 64,500 shares, investing just over $1.5 million. This purchase brought Daniels’ total stake in the company to $8.82 million.
Goldman Sachs analyst Ryan Nash acknowledges FITB’s favorable outlook. He considers the third quarter performance to be solid, with a decent PPNR outweighed by slightly higher revenues (commissions and NII) and lower expenses. He also notes that credit costs were well below expectations.
Nash believes that while investor positioning may have been somewhat mixed, comparing strong execution with balance sheet positioning for lower rates, the results were positive overall. He opines, “We think this was one of the best Q3 impressions and guidance we’ve seen in regional QTD.”
With these positive indicators, Nash supports a Buy rating on FITB. His $32 price target implies a 25% upside potential for next year.
Fifth Third Bancorp currently has a Moderate Buy consensus rating based on 15 recent analyst reviews, with 10 Buys and 5 Holds. The stock is trading at $25.49 and its average price target of $30.86 suggests approximately 21% appreciation in the coming months.
In conclusionBoth MBLY and FITB represent interesting investment opportunities, with significant internal support and favorable analyst outlooks. However, it is important for investors to conduct their own research and consider their individual risk tolerance before making any investment decisions.
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