Insider buying can provide clues about a stock’s next move. Insiders sell company stock for a wide range of reasons. Yet they only buy stock for one reason – they expect it to rise.
In this report, we are going to highlight some interesting insider buying at Analog Devices Inc (ADI:US). Analog Devices is a semiconductor company that serves over 125,000 customers worldwide. The company, which offers more 75,000 products in total, predominantly serves the industrial, communications, automotive, and consumer markets. It is listed on the NASDAQ Global Select Market and currently has a market capitalization of $90.5 billion.
Analog Devices Inc: Insider Buying
Our insider transaction data shows that on October 6, board member Bruce Evans bought 8,000 shares at a price of $164.98 per share. This trade cost the insider $1.3 million and increased the size of his holding to 100,357 shares.
Experienced Technology Investor
This trade is worth highlighting due to the fact that Mr. Evans is a very experienced investor.
Currently, he is President of Evans Capital – a private investment fund he founded in 2019 – which is focused on early and growth stage venture capital investments in technology and healthcare industry companies.
Previously, he served at Summit Partners, growth equity and venture capital focused alternative investment firm with more than $20 billion in capital under management. During his 34 years with Summit, Mr. Evans served as a board member at over 35 technology and growth industry companies, including 14 public companies.
In the past, Mr. Evans has made the Forbes Midas List on four occasions.
Accelerated Share Repurchase Program
In September, Analog Devices advised that it expects its takeover of Maxim Integrated Products to add to adjusted earnings six months ahead of its initial timeline. The company said that the accelerated timing was due to stronger business fundamentals, share repurchases, and the realization of more than 40% of cost savings. The deal with Maxim is set to boost the group’s market share in automotive and 5G chipmaking and enable it to better compete with larger businesses such as Texas Instruments.
Analog also advised in September that it would be entering into multiple accelerated share repurchase (ASR) agreements to repurchase up to $2.5 billion of the company’s common stock. The ASR agreements will be completed under the company’s current share repurchase authorization, which has approximately $10 billion in authorization remaining.
“The decision to approve our accelerated share repurchase program and increase our total share repurchase authorization reflects our confidence in our future business performance and commitment to provide meaningful return to shareholders,” commented President and CEO Vincent Roche.
Since this news, analysts at Jefferies have raised their target price from $195 to $206. That implies an upside of approximately 22%.
In light of these developments, we see the insider buying here as a bullish indicator.