If a top-level is spending millions of dollars on company stock, investors should take note. Top-tier insiders are often way ahead of analysts when it comes to the performance of their companies and their stock purchases can provide valuable trading signals.
In this report, we are going to highlight a large stock purchase from a top-level insider at Gen Digital Inc (GEN:US). Previously known as NortonLifeLock, Gen Digital is a leading global cybersecurity company. Its brands include Norton, Avast, Avira, and AVG. The company is listed on the Nasdaq and currently has a market cap of around $10.76 billion.
Insider Buying at Gen Digital
Our insider transaction data shows that on May 17, Gen Digital’s President Ondrej Vleck purchased 300,000 shares at a price of $15.79 per share. This trade cost the insider approximately $4.74 million and increased his holding to 4.16 million shares.
Mr. Vleck has considerable industry experience. Previously, he held a number of top-level positions – including CEO – at Avast, before the company was acquired by NortonLifeLock. While at Avast, he led the company’s transformation from a traditional PC antivirus vendor to a provider of a full portfolio of protection, privacy, and performance products for consumers. Given his background, he is likely to have a good understanding of Gen Digital’s prospects.
Gen Digital recently posted solid results for the fourth quarter of fiscal 2023.
For the period, revenue was up 32% year on year to $948 million, ahead of analysts’ forecast of $940 million. Meanwhile, earnings per share came in at 46 cents versus the consensus forecast of 44 cents.
However, the shares fell on the back of Gen Digital’s guidance for Q1 FY2024. For this quarter, the company expects revenue of between $940 million and $950 million. Analysts had been expecting $954.2 million.
After the recent share price weakness, the stock now trades at a huge discount to the market. With analysts forecasting earnings per share of $2.02 for the current financial year, the forward-looking P/E ratio here is just 8.0 at present.
In light of this extremely low valuation, we see the insider buying here as a bullish signal.