Top-level insiders such as CEOs and Chairmen tend to have a good understanding of their companies’ operating activities. If they’re buying company stock, it’s often a sign that the outlook for the business, and the share price, is attractive.
In this report, we are going to highlight a large CEO stock purchase at Allegion PLC (ALLE:US). Allegion is a provider of security products for homes and businesses. Focusing on security around the door and adjacent areas, it produces everything from mechanical locks to advanced biometric scanning devices. The company is listed on the New York Stock Exchange and currently has a market cap of approximately $9.9 billion.
$2 Mil CEO Purchase
Our data shows that on July 27, Allegion’s President and CEO John Stone purchased 17,500 shares at a price of $116.62 per share. This trade cost the insider approximately $2.0 million and increased his holding to 94,248 shares.
This trade got our attention due to its size. Our records show that this is the largest insider purchase at Allegion in at least nine years.
What’s also interesting about this trade is that it has increased the size of the CEO’s holding by 23%. The fact that the insider has boosted his stake by nearly a quarter suggests that he sees value in the stock at present.
Solid Q2 Results
Allegion recently posted solid results for the second quarter of 2023.
For the period, revenue came in at $912.5 million, up 18.0% year on year. Meanwhile, adjusted earnings per share (EPS) amounted to $1.76, up 23.1% and ahead of the consensus forecast of $1.71.
On the back of these results, the company raised its full-year earnings guidance. It now expects adjusted EPS of $6.70 to $6.80, which would represent growth of +11.9% to +13.5%.
“As we think about the second half of the year, we expect end markets will be stable with continued strong demand for our electronic solutions. We are raising Allegion’s full-year EPS guidance. I’m confident in our outlook and very proud of the Allegion team,” commented Mr. Stone.
In light of these solid results and the increase in guidance, we see insider buying here as a bullish indicator.