Insider Buying

Conagra Brands insider buys $1 million worth of stock

CONAGRA BRANDS INC
(CAG:US)
12 months:
+4.34%
Activity:
Bullish
Pattern:
Purchase from board member
News:
Dividend increase
CONAGRA BRANDS INC
(CAG:US)
12 months:
+4.34%
Activity:
Bullish
Pattern:
Purchase from board member
News:
Dividend increase

Insider trades can give investors a more complete view of activity within the world’s publicly-listed companies. No one has more information in relation to a company’s prospects than its executives and directors.

In this report, we are going to highlight a large insider purchase at Conagra Brands Inc (CAG:US). Conagra Brands is an American consumer packaged goods food company that makes and sells products under various brand names. Its brands include Birds Eye, Slim Jim, Healthy Choice, and Gardein. The company is listed on the New York Stock Exchange and currently has a market cap of $16.72 billion.

Insider buying at Conagra Brands

Our data shows that on July 25, board member Manny Chirico bought 30,000 CAG shares at a price of $34.06 per share. This trade cost the insider approximately $1.0 million and increased his holding to 40,788 shares.

High-conviction purchase

What stands out here is that this trade has increased the size of Mr. Chirico’s holding by around 280%. The fact that the insider has upped his stake substantially suggests that he is very confident in the prospects of the stock.

It’s worth pointing out that Mr. Chirico is a retail veteran with around 30 years of experience in the industry. So, he is likely to have a good understanding of Conagra’s prospects.

Dividend increase

Conagra Brands’ share price took a hit in mid-July on the back of underwhelming Q4 results and guidance.

For Q4, sales were up 6.2% year on year to $2.91 billion. However, analysts had been expecting $2.93 billion. The company noted that demand for its frozen foods and ready-to-eat meals had fallen following recent product price increases.

Meanwhile, Conagra said that it expects its fiscal 2023 adjusted profit per share to increase by 1% to 5%, versus estimates of a 8.3% rise. The company blamed lingering supply chain issues, and soaring freight and ingredient costs for the lower level of profitability.

It’s worth noting though that on July 22, Conagra increased its quarterly dividend by a healthy 5.6%. This indicates that management is confident in relation to the growth story.

In light of this dividend increase, and the fact that the stock currently trades at a relatively low valuation (P/E ratio of 14) after its recent pullback, we see the insider buying here as a bullish indicator. 

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