Corporate officers and members of the board of directors tend to have deep insight into their companies’ operations. If these insiders are buying company stock, it’s often worth taking a closer look.
In this report, we are going to highlight a large director purchase at Anthem Inc (ANTM:US). Anthem is a US health benefits company that offers a broad range of network-based managed care plans to employers and individuals. Through its affiliated companies, the group serves nearly 110 million people. The company is listed on the New York Stock Exchange and currently has a market capitalization of $92.6 billion.
Anthem Inc: Insider Buying
Our insider transaction data shows that on 23 July, Anthem board member Ryan Schneider bought 1,300 ANTM shares at a price of $384.36 per share. This purchase cost the insider just under $500,000.
38% Increase in Position
This trade is worth highlighting for several reasons. Firstly, it’s substantial both in nominal and relative terms. Our data shows that it has increased the insider’s holding by 38%. This suggests that Mr. Schneider is very confident that the stock is set to rise.
Secondly, Mr. Schneider has made well-timed purchases in the recent past. Our data shows that back in February, the insider purchased 1,700 Anthem shares at a price of $296.03 per share. Since then, the stock has risen 28% to $380.
Profit Forecast Raised
Anthem recently posted a solid set of second-quarter results and raised its profit target for 2021. For Q2, operating revenue was up 14.1% to $33.3 billion, while earnings per share came in at $7.03 – well above the consensus estimate of $6.33 per share. Looking ahead, the company said it expects to earn over $25.50 per share in 2021, compared to its previous guidance of over $25.10.
“We continued to deliver on our commitments to our stakeholders while making considerable progress against our long-term strategy during the second quarter, all while navigating an uncertain environment due to the pandemic,” said Gail Boudreaux, Anthem’s President and CEO.
On the back of this guidance upgrade, a number of brokers raised their target prices for the stock. Jefferies raised its target price to $453 from $447, Cantor Fitzgerald raised its target price to $455 from $430, while Mizuho raised its target price to $385 from $380.
In light of these developments, we see the insider buying here as a bullish indicator.