Top-level company insiders such as CEOs, COOs, and CFOs tend to understand their companies better than anyone else. They are in possession of the most up-to-date information and if they’re buying stock, it’s nearly always a bullish development.
Here, we are going to highlight some insider purchases at Atlas Technical Consultants Inc (ATCX:US). Atlas Technical Consultants is an American company that provides professional and technical testing, inspection engineering, and consulting services in the United States. It’s listed on the NASDAQ stock exchange and currently has a market capitalization of $267 million.
Atlas Technical Consultants: insider buying
Form 4 filings show that between 1 December and 2 December the CEO of Atlas Technical Consultants, Joe Boyer, purchased 11,000 ATCX shares at an average price of $5.48 per share. The COO, Gary Cappa, also purchased 50,000 ATCX shares at an average price of $5.72 per share. This purchase boosted his holding by approximately 155%. Additionally, between 1 December and 3 December the CFO, David Quinn, purchased 75,000 ATCX shares at an average price of $5.80, boosting his holding by around 280%.
These director dealings look interesting for a number of reasons. Firstly, three of the highest-ranking insiders have bought stock in a very short period of time. This suggests that the sentiment inside the company is very bullish and the expectations are that the share price is likely to rise.
Secondly, both the CFO and COO have increased their holdings by a significant amount, this is what we like to observe. Our Insider Model views this insider purchase as very positive.
Reassuring Q3 results
Atlas Technical Consultants shares are currently down about 20% since mid-October. This is due to the fact that the company’s profitability has been impacted by Covid-19.
In the third quarter, there was a quarterly loss of $0.16 per Class A share yet revenue was only slightly down year on year and full-year 2020 adjusted EBITDA was increased marginally to a range of $61 million to $64 million. The benefits of the company’s recent acquisition of Alta Vista now appear to be coming through with the order backlog standing at a record $638 million. “Our strong third-quarter results were in line with our expectations and showed a continuation of positive market momentum since mid-year”, management said in the Q3 results.
Given this news, we see the insider buying here as a bullish signal. It suggests that top company insiders believe the stock is currently undervalued.