Company insiders such as directors tend to have the latest information on their companies’ prospects. If they’re buying stock, it’s normally a positive development.
Here, we are going to highlight a large director purchase at Conagra Brands Inc (CAG:US). Conagra Brands is an American consumer packaged goods food company. The company’s segments include Grocery & Snacks, Refrigerated & Frozen, International, and Foodservice. It’s listed on the New York Stock Exchange and currently has a market capitalization of $16.2 billion.
Conagra Brands Inc: Insider Buying
Form 4 filings show that on 8 January a director at Conagra Brands, Richard Lenny, purchased 10,000 CAG shares at a price of $33.70 per share. This purchase cost the insider $337,000.
This insider purchase looks interesting for a couple of reasons. Firstly, Lenny has a wealth of industry experience. He has been a director at Conagra Brands for nearly twelve years and before that he was CEO of The Hershey Company and was a Vice President of Kraft Foods.
Secondly this is a substantial purchase by the insider in monetary terms. It suggests he is confident in the future prospects of the company.
Good Q2 results
Covid-19 has benefited Conagra Brands as more consumers have increased their at-home food consumption. In the second quarter, net sales increased 6.2% to $3 billion compared to Q2 of the prior year. Meanwhile, diluted earnings per share from continuing operations for the second quarter grew 45.3% to $0.77, and adjusted EPS grew 28.6% to $0.81.
Sean Connolly, the CEO commented: “Our second quarter results reflect strong performance across the business.” "We remain confident that Conagra Brands is well-positioned to capture the benefits of the shifting consumer behavior, many of which we believe will continue well into the future,” he added.
On the back of this news, we see the insider buying here as a bullish signal. It suggests that the insider believes that the recent pullback in the shares is not warranted.