Insider transaction activity can help investors cut through the data overload. If insiders are buying stock, for example, it signals that they are confident about the future and that they expect their company’s share price to rise.
In this report, we are going to highlight some interesting insider buying activity at DXC Technology Co (DXC:US). DXC is a US technology company that helps businesses modernize their IT, optimize data infrastructures, and ensure security and scalability across the cloud. The firm serves businesses in a wide range of industries, including the aerospace, defense, healthcare, insurance, and travel industries. It is listed on the New York Stock Exchange and currently has a market capitalization of $9.2 billion.
DXC Technology Co: Insider Buying
Our data shows that in August, DXC board member Raul Fernandez purchased stock on eight occasions. In total, the insider picked up 19,383 shares, spending about $680,000 on stock. His purchases increased the size of his holding from 29,485 shares to 54,468 shares.
Experienced Technology Investor
Mr. Fernandez has a considerable amount of experience in the technology sector and is an active investor in the space. Previously, he founded Proxicom, which under his leadership evolved into a prominent global provider of e-commerce solutions and was acquired by Dimension Data in an all-cash transaction valued at $450 million. Currently, he serves on the board of directors at Broadcom, Inc. a global technology leader in semiconductor and infrastructure software solutions.
What stands out about the recent purchases from Mr. Fernandez is that they have increased the size of his position by 85%, which is a significant increase. This suggests he is very confident that DXC stock is set to rise. It’s worth noting that Mr. Fernandez made a number of purchases late last year and early this year at much lower levels which indicates that the insider is good at timing his trades well.
Strong Rise in Net Income
DXC Technology recently posted a solid set of first-quarter results.
While revenue for the quarter was down 8% year on year to $4.14 million, net income came in at $282 million, a significant improvement on the net loss of $199 million posted a year earlier. Diluted earnings per share came in at $1.07 compared to -$0.81 in Q1 last year. Encouragingly, revenue, adjusted EBIT margin, and non-GAAP EPS all exceeded the company’s guidance range.
“Our results show that DXC continues to achieve on its short-term and longer-term financial objectives. We have encouraging revenue performance, margins are expanding, and our bookings clearly demonstrate that we continue to win in the marketplace,” commented President and CEO Mike Salvino.
Looking ahead, the company said that for the full year, it expects to generate non-GAAP diluted EPS of $3.45 to $3.65. That would represent growth of 42% to 50% on last year’s EPS figure of $2.43.
In light of these results, we see the insider buying here as a bullish indicator.