If an insider is buying shares in their own company, it’s often worth taking a closer look. Insiders are some of the most informed participants in the market and their trading activity can provide valuable clues about a stock’s potential.
In this report, we are going to highlight some interesting insider buying at Darling Ingredients Inc (DAR:US). Darling Ingredients is an American company that develops sustainable food, feed, and fuel ingredients. Its ingredients are marketed internationally to a range of industries including the pharmaceutical, food, animal feed, pet food, biofuel, fertilizer, sports nutrition, and cosmetic industries. The company is listed on the New York Stock Exchange and currently has a market capitalization of $11.0 billion.
Darling Ingredients: Insider Buying
Our insider transaction data shows that on 16 June, Darling’s Global Controller and Chief Accounting Officer Joe Manzi bought 1,975 DAR shares at a price of $67.65 per share. This purchase – which cost the insider $133,600 – increased his holding from 1,153 shares to 3,128 shares.
Largest Insider Purchase Since 2017
This trade is worth highlighting for several reasons. Firstly, the purchase is large in relative terms. It represents the largest insider purchase at Darling Ingredients since May 2017. Our Insider Model views this as bullish.
Secondly, the trade has increased the size of Manzi’s position significantly. Our data shows that it has increased the size of his holding by 171%. This significant increase suggests that he is very confident that the stock is set to move higher.
Best Quarter In the Company’s History
Darling Ingredients recently had its best quarter ever. For the three-month period ended 3 April 2021, the company reported net sales of $1.05 billion, up from $852.8 million in Q1 2020. Net income came in at $151.8 million, or $0.90 per diluted share, compared to net income of $85.5 million, or $0.51 per diluted share, for the first quarter of 2020. As of 3 April, the company had $71.4 million in cash and cash equivalents on its books, and $879.9 million available under its committed revolving credit agreement.
As a result of this strong performance, the company raised its guidance for the full year. It now expects adjusted EBITDA to be between $1.075 billion and $1.150 billion for 2021, which would represent growth of 28% to 35% year on year.
Since the Q1 results, a number of analysts have raised their price targets for the stock. Analysts at Baird, for example, have increased their price target for DAR stock to $89 from $75. Piper Sandler, meanwhile, has increased its price target to $105 from $95.
In light of these developments, we see the insider buying here as a bullish indicator.