Corporate executives and directors tend to have superior information in relation to their firms’ operating activities. If these insiders are buying company stock, it’s generally a positive development.
In this report, we are going to highlight some interesting insider buying at Parsons Corp (PSN:US). Parsons Corp is a provider of technology solutions to the defense, intelligence, and critical infrastructure markets. Operating at the nexus of critical infrastructure and national security, it provides solutions that connect communities, reimagine physical infrastructure, increase sustainability and health, and protect the world from threats across land, sea, space, air, and cyber. It’s listed on the New York Stock Exchange and currently has a market cap of $4.3 billion.
Insider buying at Parsons Corp
Our insider transaction data shows that on August 5, ex-CFO George Ball purchased 35,000 PSN shares at a price of $41.50 per share. This trade cost the insider approximately $1.45 million and increased his direct holding to 87,857 shares (he also holds 170,000 shares in a family trust).
This purchase is worth highlighting for a couple of reasons.
Firstly, it’s substantial. It’s large in nominal terms and also in relative terms having boosted the insider’s total holding by about 16%. The size of the trade indicates that Mr. Ball is very confident the stock is set to move higher. Our Insider Model views the trade as very bullish.
Secondly, Mr. Ball has considerable company experience so is likely to know the business very well. He joined Parsons in 1995 and served in multiple roles before being appointed CFO in 2008. In mid-2022, he stepped down as CFO and joined the Board of Directors.
It’s worth noting that Mr. Ball has made well-timed purchases in the recent past. For example, in February 2022, he picked up 40,000 shares at a price of $33.40 per share. And in November 2020, he snapped up 20,000 shares at a price of $30.25 per share.
Full-year guidance raised
Parsons Corp recently posted a strong set of Q2 results.
For the period, revenue came in at $1,009 million, up 15% year on year (organic growth of 9%), and above the consensus forecast of $929 million. Meanwhile, adjusted EBITDA rose 18% to $77 million. Net income was $18 million, up 173% year on year.
On the back of these results, the company upgraded its full-year guidance. It now expects revenue of $3.95 billion to $4.15 billion versus prior guidance of $3.70 billion to $3.90 billion and adjusted EBITDA of $330 million to $360 million versus $315 million to $345 million.
“I am encouraged by where we are today and optimistic about our future. Parsons is well positioned to take advantage of the growing budgets and opportunities that exist in both our critical infrastructure and national security markets, and we expect our progress to continue as we further leverage the technical expertise of our talented employees,” commented Chair, President, and CEO Carey Smith.
In light of these results and the upgraded guidance, we see the insider buying here as a bullish indicator.