Insider buying can reveal valuable clues about a stock’s potential to investors. Insiders may sell their company stock for a variety of reasons. But they only buy stock for one reason – they expect it to go up.
Here, we are going to highlight insider trades at Ball Corp (BLL:US). Ball is an American packaging and aerospace company that has clients in the US, Brazil and internationally. Its packaging division provides aluminum packaging to the beverage, food, personal care and household products industries while its aerospace division manufactures spacecraft, components and instruments for national defense, civil space, and commercial space applications. It’s traded on the New York Stock Exchange and currently has a market capitalization of $29 billion.
Ball Corp: Insider Buying
Form 4 filings show that on 12 August, a Director at Ball, Cynthia Niekamp, purchased 3,000 BLL shares at a price of $89.27 per share. This purchase cost the insider approximately $265,000 and increased her stake by 50%. Then, on 13 August, a fellow Director, Todd Penegor, also purchased 3,000 BLL shares at a price of $89.62 per share, spending around $270,000 on stock.
$500k+ Spent on Stock
These insider trades came to our attention as our data shows that these are the first insider purchases at Ball in over a year. This suggests that sentiment towards the stock within the board room is improving. The two Directors have spent over $500,000 on company stock which indicates that they are very confident in Ball’s future prospects.
It’s worth noting that both of the Directors have a wealth of related experience. Penegor currently serves as CEO of restaurant chain Wendy’s and has also worked at the Kellogg Company and the Ford Motor Company. Meanwhile, Niekamp was a Senior Vice President at industrial coating giant PPG where she was instrumental in driving its revenues forward. She also currently serves on the Board of Magna International Inc, a multi-billion Canadian auto parts manufacturer.
Knock-out Q2 Results
Ball recently produced a stunning set of Q2 results with the company experiencing positive momentum throughout its business. Sales for the quarter rose to $3.5 billion versus $2.8 billion achieved a year prior while second-quarter GAAP earnings per diluted share of 61 cents were more than double the 28 cents achieved in Q2 2020. The company stated that demand for aluminum cans and bottles outstripped supply in North America and it continues to invest in additional capacity.
Looking ahead, management was optimistic about the future. "The company is well-positioned for long-term growth and we recently accelerated return of value to shareholders in 2021 by increasing our dividend 33% and initiating share repurchases of at least $500 million. Our financial strength and flexibility provide the opportunity to return value to shareholders while also investing in excess of $1.5 billion in capital expenditures to further grow cash from operations, earnings and EVA dollars. We look forward to investing in more organic growth opportunities and returning even more to our shareholders in the future as our cash from operations continues to accelerate," said Scott C. Morrison, executive vice president and CFO.
On the back of these strong results and confident outlook we see the insider trading at Ball as bullish. The large purchases from the two directors suggests that they see the stock as undervalued and that they are confident the share price will move in an upward direction.