Top-level corporate insiders such as CEOs, CFOs, and Chairmen tend to have the most up-to-date information on their companies. If these insiders are buying company stock, it’s usually a sign that business performance is strong and that the outlook for the stock is positive.
In this report, we are going to highlight some buying from a top-level insider at Aon PLC (AON:US). Aon is a leading global professional services firm that provides a broad range of risk, retirement, and health solutions. The group combines proprietary data, technology, and advisory services to develop insights that help clients reduce volatility and improve performance. It is listed on the New York Stock Exchange and currently has a market capitalization of $63.1 billion.
Aon: Insider Buying
Our insider transaction data shows that on 4 August, Aon’s Chairman Lester B. Knight bought 10,000 shares in the company at a price of $263.95 per share. This trade cost the insider a total of $2.6 million and increased his holding to 105,000 shares.
Healthcare Investment Expertise
Mr. Knight – who has served as Aon Chairman since 2008 – has considerable experience in both the investment management and healthcare industries. He is a Founding Partner of RoundTable Healthcare Partners – a private equity firm focused exclusively on the healthcare industry. Previously, he was Vice Chairman and director of Cardinal Health, Inc., a diversified healthcare service company. Given his background, he is likely to have a good understanding of Aon’s intrinsic value. It’s worth noting that the insider picked up 10,000 Aon shares in November at much lower levels.
What stands out about his latest trade is the size of the transaction. The fact that the insider has spent $2.6 million on stock suggests that he is very confident the share price is set to rise.
11% Increase in Dividend
Aon recently posted a solid set of second-quarter results.
For the quarter, revenue was up 16% to $2.9 billion, including organic revenue growth of 11%, while adjusted net income per share was up 17% to $2.29.
For the first six months of 2021, cash flow from operations increased 10% to $1,345 million, while free cash flow increased 13% to $1,275 million.
“In the second quarter, our team delivered 11% organic revenue growth, our strongest growth in over a decade, that translated into 17% growth in earnings per share, and contributed to 13% free cash flow growth for the first half,” commented CEO Greg Case.
“These results demonstrate the incredible resilience of our colleagues and the power of Aon United. We are moving forward at an accelerated pace, with a proven leadership team and an enduring strategy. Our ability to innovate on behalf of clients remains unrivaled and continues to translate into significant progress against key financial metrics and shareholder value creation,” he added.
On the back of these results, Aon announced an 11% increase to its quarterly cash dividend.
In light of these results and the significant increase in the dividend, we see the insider buying here as a bullish indicator.