With U.S. inflation hitting a 40-year high, investors are now expecting the U.S. Federal Reserve to announce aggressive interest rate hikes. Amid the broader market sell-off and persistent market headwinds, it is difficult for investors to look at thousands of stocks and identify those that could offer attractive buying opportunities, or that are better avoided.
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In such a situation, tracking stocks that have witnessed insider trading over the recent days could be helpful in making investment decisions.
Corporate Insiders (like CEOs, CFOs, COOs, or other officers, directors, or a person or entity owning more than 10% of a company’s shares), disclose their stakes and transactions in the company’s shares to the SEC (Securities and Exchange Commission).
TipRanks’ Insiders’ Hot Stocks tool provides a list of stocks that have seen insider trading activity recently. Thus, saving investors from the daunting task of going through innumerable SEC filings, just to keep a tab on insider transactions.
Using the Insiders’ Hot Stocks tool, we selected two stocks that insiders seem to be interested in.
Camping World Holdings (NYSE: CWH)
First up is Camping World, America’s leading retailer of recreational vehicles (RVs) and related products and services. The company gained from a spike in demand for outdoor activities amid social distancing restrictions triggered by the pandemic.
However, shares have declined 37% year-to-date on concerns of fading pandemic tailwinds. Additionally, the impact of higher gas prices and inflation has weighed on RV demand.
As per an SEC filing, Camping World’s Chairman and CEO (and also a >10% shareholder) Marcus Lemonis recently completed an Informative Buy, which implies that the insider purchased the shares with his or her own capital. On June 10, the CEO purchased 38,350 shares of Camping World for an aggregate amount of $1.01 million.
Also, director Kent Dillon Schickli bought 5000 shares on May 17 as well as on May 18, for a total amount of $0.28 million.
Based on these two informative insider transactions made over the last three months, the Insider Confidence Signal for Camping World is Positive.
Meanwhile, Raymond James analyst Joseph Altobello lowered his price target on Camping World to $40 from $45, but maintained a Buy rating. The analyst adjusted his forecasts following the company’s “mixed” Q1 results. and management’s commentary about demand softening since February.
Altobello stated that he is taking a “much more conservative approach” to his model given the lack of visibility.
Overall, the Street is cautiously optimistic on the stock, with a Moderate Buy consensus rating based on four Buys and three Holds. The average Camping World price target of $36.43 implies 43.09% upside potential from current levels.
Hims & Hers Health (NYSE: HIMS)
Hims & Hers is a telehealth platform that connects patients to licensed healthcare professionals and enables access to treatments for several conditions, including those related to hair loss, dermatology, sexual health, mental health, and primary care.
This growth company delivered revenue of $101.3 million in Q1’22, reflecting a 94% year-over-year rise. The robust top-line growth helped in bringing down the net loss per share to $0.08 from $0.34 in the prior-year quarter.
Further, the company gained 101,000 member subscriptions in Q1, marking the largest-ever quarterly gain. Hims & Hers ended the quarter with 710,000 subscriptions, up 82% year-over-year.
Like several other growth stocks, shares of Hims & Hers have also plunged significantly due to macro headwinds, and are down nearly 42% year-to-date.
Jules Maltz, a director on the company’s board and a shareholder with over a 10% stake, recently disclosed an Informative Buy transaction in a Form 4 filed with the SEC. Maltz, along with related entities, bought 50,000 shares for nearly $0.2 million.
Last month, the company’s CFO Oluyemi Okupe purchased 7,500 shares for about $26,325.
Overall, the Insider Confidence Signal for Hims & Hers is Positive based on six informative insider transactions over the last three months.
Recently, Piper Sandler analyst Sean Wieland lowered his price target on Hims & Hers to $6 from $8, and reiterated a Buy rating. Wieland noted that the company “continues to deliver phenomenal growth,” but it has a cash-pay direct-to-consumer business model that relies on digital marketing and the health of the U.S. consumer.
Wieland further pointed that high churn and short duration subscriptions imply that past performance is not a guarantee of future results.
Overall, the stock scores a Strong Buy consensus rating backed by four Buys and one Hold. At $7.40, the average Hims & Hers price target implies 93.21% upside potential from current levels.
Conclusion
The Insider Confidence Signal for both Camping World and Hims & Hers is Positive based on recent Informative Buys in these stocks. While investors should conduct their own due diligence before making an investment decision, keeping an eye on insider transactions is certainly helpful to understand the sentiment of those who are generally known to have more insights about a company.
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