Top-level insiders such as C-suite executives 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 stock is attractive.
Here, we are going to highlight some C-suite buying at Concentrix Corp (CNCX:US). Concentrix is an American business services company. The company, which helps clients with their customer engagement and business performance, operates through three divisions: CX Consulting + Design, Digital CX Operations, and Digital CX Technology. It’s traded on the Nasdaq and currently has a market capitalization of $6.86 billion.
Concentrix Corp: Insider Buying
Our insider transaction data shows on July 12, the CFO of Concentrix, Andre Valentine, purchased 2,500 CNXC shares at a price of $126.99 per share. This purchase cost Mr. Valentine around $310,000 and increased his holding in the company by about 7%.
This insider trading activity is worth highlighting for two reasons.
Firstly, our insider transaction data shows that this is the largest purchase of company stock at Concentrix since the company came to the market in late 2020. In spending a large amount of money on CNXC stock, the insider is creating the impression that he strongly feels that the shares are undervalued right now.
Secondly, Mr. Valentine was CFO at direct competitor Convergys for over twenty years until Concentrix merged with Convergys in 2018. He has been CFO at Concentrix for the past four years. This means he is likely to know the sector incredibly well and be able to value the company accurately.
Concentrix reported a strong Q2 2022 update that saw all of its key metrics improve versus the second quarter last year.
Revenue of $1.57 billion in Q2 was 14.8% higher than a year before and adjusted EBITDA was 20% higher at $249.9 million. The operating margin moved up 0.6% to 10% and the diluted EPS of $2.14 was 36.3% higher than 12 months prior.
Full-year revenue growth for 2022 is expected to be 14% to 15% higher than last year as previously reported.
“Broad-based strength across the business, strong wins with enterprise and new-economy clients, and a robust pipeline across our strategic verticals keep us confident that we will continue to grow faster than the market while expanding our margins,” said Chris Caldwell, Concentrix CEO.
This year, the fall in the Nasdaq has led to Concentrix shares falling in value. Year to date, the stock is down around 25%. After this fall, the stock now trades on a forward-looking P/E ratio of just 11.
The buying from the CFO suggests that he believes the stock is oversold. We see this insider activity as a bullish indicator.