In this article, I will feature one services sector stock that has seen intensive insider buying during the last 30 days. Intensive insider buying can be defined by the following three criteria:
- The stock is purchased by three or more insiders within one month.
- The stock is sold by no insiders in the month of intensive purchasing.
- At least two purchasers increased their holdings by more than 10%.
The ADT Corporation (ADT) provides electronic security, interactive home and business automation, and related monitoring services under the ADT, ADT Pulse, and Companion Service brands to residential and small business customers in the United States and Canada.
Insider buying during the last 30 days
Here is a table of ADT's insider-trading activity during the last 30 days by insider.
|Name||Title||Trade Date||Shares Purchased||Current Ownership||Increase In Shares|
|Donald Boerema||SVP||Feb 3||500||33,865 shares||+1.5%|
|Michael Geltzeiler||CFO||Feb 3||10,000||31,900 shares||+45.7%|
|Richard Daly||Director||Feb 3||3,000||3,510 shares||+588.2%|
|Thomas Colligan||Director||Feb 3||3,000||12,285 shares||+32.3%|
There have been 16,500 shares purchased by insiders during the last 30 days.
Insider buying by calendar month
Here is a table of ADT's insider-trading activity by calendar month.
|Month||Insider buying / shares||Insider selling / shares|
There have been 21,500 shares purchased, and there have been 107,754 shares sold by insiders since January 2013. The month of February 2014 has seen the most insider buying.
ADT reported the fiscal 2014 first-quarter, which ended December 27, financial results on January 30 with the following highlights:
|Net income||$77 million|
ADT's shares plunged after these results. The insiders started buying shares after the plunge.
ADT expects 4%-5% revenue growth for fiscal year 2014.
(Source: Earnings presentation)
(Source: January presentation)
There have been four different insiders buying ADT, and there have not been any insiders selling ADT during the last 30 days. Three of these four insiders increased their holdings by more than 10%. ADT has an insider ownership of 0.30%.
There are six analyst buy ratings, four neutral ratings, and zero sell ratings with an average price target of $41.79. I have a cautiously bullish bias for the stock currently based on the intensive insider buying.