Company insiders tend to have the most up-to-date information to hand in relation to their companies’ prospects. If they are buying company stock it is normally a positive development.
Here, we are going to highlight an insider purchase at Church & Dwight Inc (CHD:US). Church & Dwight develops, manufactures, and markets household, personal care, and specialty products in the US and internationally. It’s traded on the New York Stock Exchange and currently has a market capitalization of $21.4 billion.
Church & Dwight Inc: Insider Buying
Form 4 filings show that on 24th February an Executive Director of Church & Dwight, James Craigie, purchased 6,000 CHD shares at a price of $80.26 per share. Following that, on 3rd March, he added another 5,000 shares to his holdings at the price of $78.62 per share. These purchases cost the insider a total of $874,630 and raised his holding considerably as he only held 1,840 shares before these purchases.
This insider trade looks interesting due to the fact that James Craigie has held a number of senior positions at Church & Dwight. Previously, he was CEO of the company from 2004 until 2016. On top of this he was Chairman from 2007 to 2019 and also held the role of President for a number of years. This would suggest that no one knows the company better than him.
Additionally, our data shows this is the first insider purchase at Church & Dwight for a number of months. Craigie has invested a significant amount of money in the company’s shares which suggests he is confident the share price will go up.
Further Growth Expected
Church & Dwight released impressive full year and Q4 results at the end of January. EPS for full year 2020 grew by 27.9% to $3.12 per share. The adjusted EPS of $2.83 was an increase of 14.6% which was higher than the forecast of 13%. Organic sales growth was 9.6% and cash from operations was up 14.6% at $990.3 million. There were positive trends in Q4 with net sales growth of +13.2% and organic sales growth came in at +10.8%. The quarterly dividend was raised by 5.2%.
“We expect 2021 to be another strong year with adjusted EPS of $3.00 to $3.06, an increase of 6%-8%, driven by operating income growth. This reflects continued strong business performance in-line with our Evergreen model. In 2021, we expect several categories to remain at elevated consumption levels,” the CEO said.
In light of these positive results and confident outlook, we see the insider buying here as bullish. It suggests that the insider expects there to be further growth to come and momentum in the share price.